Gold prices spiked on Friday, heading towards their first monthly gain since January on increased safe-haven demand, after U.S. President Donald Trump vowed to levy tariffs on all imports from Mexico, ratcheting up concerns of a global economic slowdown.
The new threat of levies on Mexico, coupled with a string of soggy economic data from the United States this month and the long-drawn Sino-U.S. trade war, also translated into more predictions that the U.S. Federal Reserve could cut interest rates this year.
Spot gold increased in price 0.5% at $1,294.72 U.S. per ounce early Friday. It has risen about 0.9% so far this month.
The metal is also on track for a second consecutive weekly gain, up about 0.8% over the week.
U.S. gold futures rose 0.6% to $1,294.70 U.S. an ounce.
Trump on Thursday vowed to impose a tariff on all goods coming from Mexico starting at 5% and ratcheting higher until the flow of illegal immigrants into the United States slows or stops.
Data showed that U.S. inflation was much weaker than initially thought in the first quarter amid a sharp slowdown in domestic demand, which could cast doubts on the Fed’s view that the benign price pressures were largely because of temporary factors.
Among other metals, silver edged 0.1% higher to $14.54 U.S. per ounce but was heading for its fourth straight monthly loss.
Platinum was steady at $791.36 U.S. per ounce, having fallen to its lowest level since Feb. 15 at $784.42 in the previous session. The metal was on track for its biggest monthly loss since Nov. 2015, down 10.7% so far.
Palladium fell 0.3% to $1,363.26 U.S. per ounce, not far away from a peak since May 1 at $1,380.75 it touched in the previous session.
