LONDON: Gold prices surged to a one-month high on Friday as the threat of a global trade war sent investors scrambling for safe assets.

US President Donald Trump signed a memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, prompting Beijing to urge the United States to “pull back from the brink”.

The tariffs have a 30-day consultation period, leaving room for compromise, but investors fear a trade war could develop with potentially dire consequences for global growth.

Global markets were further rattled by Trump’s appointment of John Bolton as National Security Advisor. Bolton has previously advocated using military force against North Korea and Iran.

Adding to the turmoil, Trump also threatened to veto the $1.3 trillion spending bill passed by Congress, raising the spectre of a government shutdown. World stock markets, the US dollar and US bond yields were all lower.

“Risk aversion is currently the name of the game in financial markets,” said Peter Fertig, analyst at Quantitative Commodity Research. “Markets are looking for safe havens.”

Gold is traditionally seen as a safe place to park assets in times of uncertainty. Spot gold was up 1.4 per cent at $1,347.53 an ounce by 1417 GMT, having hit its highest since Feb 19 at $1,350.10. US gold futures for April delivery gained 1.5pc to $1,347.20.

In other precious metals, silver rose 1.4pc to $16.59 an ounce, up 1.8pc this week. Platinum gained 0.4pc to $950.50 and was set for a weekly gain of 1pc.

Platinum’s discount to gold on Friday hit its highest since Reuters data began in 1985. Platinum was $387 an ounce cheaper than gold, having traded at an average premium of $151 an ounce over the past 30 years. Palladium firmed by 0.1pc to $980.72.

Published in Dawn, March 24th, 2018