Gold Hits Record on Tariffs Uncertainty, Rate Cut Bets

Gold prices gained on Thursday, reaching a new record, as elevated tariff uncertainty and bets on monetary policy easing by the Federal Reserve kept bullion's appeal strong.

Spot gold firmed to $2,961.26 an ounce, surpassing the previous record high of $2,956.15 scaled in February.

U.S. gold futures were up 0.2% at $2,952.40.

"Gold is in a secular bull market. We forecast prices to trade between $3,000-$3,200 this year," said Alex Ebkarian, chief operating officer at Allegiance Gold.

U.S. President Donald Trump's latest trade policies have helped gold gain 12% so far this year, an asset preferred by investors amid geopolitical and economic turmoil. U.S. Commerce Secretary Howard Lutnick said a recession would be "worth it" to get Trump's economic policies in place.

Data from the U.S. Labor Department showed producer prices were unexpectedly unchanged in February, while consumer price index rose 0.2% last month after accelerating 0.5% in January.

Meanwhile, the number of Americans filing new applications for unemployment benefits fell last week, but sharp government spending cuts and an escalating trade war threaten labor market stability.

"The Federal Reserve is going to be at a point where they might be forced to lower interest rates. A drop in interest rates is viewed as a positive for gold because the opportunity costs drops when yields drops," Ebkarian added.

The Fed is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range next Wednesday, having reduced it by 100 basis points since September. Traders expect the U.S. central bank to resume cutting borrowing costs in June after it paused its easing cycle in January.

Spot silver fell 0.6% at $33.05 an ounce, platinum lost 1.3% to $971.73, while palladium dropped 0.6% to $942.82.