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Gold surged to a record high above $3,000 per troy ounce, as fears over the threat to global growth from Donald Trump’s trade war push investors into the safe haven metal.

The price of bullion rose to $3,004 per troy ounce on Friday. Gold has been the among the world’s best-performing assets since Trump took office in January, and has risen 14 per cent since the start of the year.

The US president’s fast-changing tariff policies have sparked concerns that a global trade war will fuel inflation and cause an economic slowdown in the US and beyond, causing Wall Street stocks to fall into a correction and adding to gold’s appeal.

Expectations of interest rate cuts by the US Federal Reserve have also buoyed bullion, which as a non-yielding asset typically benefits from lower borrowing costs.

“Both institutional and private investors are turning to gold to hedge their portfolios against economic turbulence,” said Alexander Zumpfe, senior precious metals trader at Heraeus.

“The physical gold market is experiencing strong demand” because precious metals are valued as protection against economic crises, he added.

Gold’s last major price milestones were during the financial crisis, when it passed $1,000 per troy ounce in March 2008 — and during the Covid-19 pandemic, when prices hit $2,000 in August 2020.

Concerns that Trump might place tariffs on bullion have driven an unprecedented surge of gold bars into New York, where stockpiles on the Comex have reached record levels.

Since Trump was elected, more than $70bn of gold has been flown into New York, although that flow has recently started to slow.

The unexpected surge in gold prices this year has sent investment banks racing to revise their price forecasts. At least four banks — Citibank, Goldman Sachs, Macquarie and RBC — have raised their forecasts in recent weeks.

The rise above $3,000 means gold has risen nearly tenfold since 2000, outperforming major stock indices.

“Gold is the best-performing asset class of the 21st century so far,” said Adrian Ash, director of research at BullionVault, a gold trading platform. Since the turn of the millennium, bullion had benefited from market shocks such as the 2008 financial crisis and the UK Brexit vote in 2016, as well as from increasing geopolitical conflict, he said.

“That has been the sea change for gold, that hubris that western democracy had 25 years ago has absolutely been shattered,” said Ash.

Gold’s surge in recent years has also been fuelled by demand from central banks as they diversify their holdings away from the US dollar. Central banks, mainly in emerging markets, have bought more than 1,000 tonnes of gold annually for the past three years in a row.

John Ciampaglia, chief executive of Sprott Asset Management, said that growing levels of government debt were one of the biggest factors driving bullion’s performance since the turn of the millennium.

“Global levels of debt have exploded over the past 25 years, they are starting to really weigh on economies and budgets,” said Ciampaglia. “That is why gold has proven itself to be a store of value, not for the last 25 years, but for the last 5,000 years, because it can hold its value relative to traditional currencies.”

Gold’s momentum suggests prices are likely rise further this year, according to Michael Haigh, commodities analyst at SocGen, who forecasts a price of $3,300 per troy ounce by the end of the year.