Gold prices rose on Thursday as U.S. auto tariffs escalated global trade tensions ahead of an April 2 deadline for reciprocal tariffs from the world's largest economies.

Spot gold was up 0.5% at $3,033.20 an ounce, as of 0535 GMT. U.S. gold futures were up 0.6% at $3,039.00.

U.S. President Donald Trump on Wednesday announced a 25% tariff on imported cars and light trucks starting next week, widening a global trade war.

Investors are concerned that Trump's retaliatory tariffs, expected to take effect on April 2, could stoke inflation, slow economic growth and escalate trade tensions. Concerns over Trump's tariff policies sent gold prices to a record high of $3,057.21 on March 20. Aakash Doshi, global head of gold at SPDR ETF Strategy, expects gold to break through $3,100 in the second quarter and "the market could potentially rally another 8%-10% by end-2025 if current macro and physical markets support the yellow metal."

Goldman Sachs on Wednesday raised its year-end 2025 gold forecast to $3,300 an ounce from $3,100, citing stronger-than-expected ETF inflows and continued central bank demand.

Investors are awaiting U.S. personal consumption expenditures data, due out on Friday, which could provide a clearer picture of the path of U.S. interest rates.

"The March high near $3,057 is immediate resistance for gold. $3,100 is next," said Ilya Spivak, global head of macro at Tastylive.

The U.S. central bank left interest rates steady last week but indicated it could cut rates later this year. Non-yielding bullion tends to thrive in a low-interest-rate environment.

Minneapolis Federal Reserve Bank President Neel Kashkari said that while the U.S. central bank has made a lot of progress in lowering inflation, "we still have a lot of work to do" to bring inflation to the Fed's 2% target.

Spot silver fell 0.1% to $33.68 an ounce, platinum fell 0.3% to $971.6 and palladium fell 0.4% to $964.01. (Newsmaker23)

Source: Reuters