Gold prices surged above $3,100 per ounce on Monday to a record high, as worries about potential inflation due to U.S. tariffs set the safe-haven asset up for its strongest quarter since 1986.

Bullion continued its remarkable rally that has already seen the metal gain around 18% so far this year.

Spot gold jumped 1.1% to $3,117.43 per ounce by 0935 GMT, having hit a record $3,128.06 earlier. U.S. gold futures were up 1.1% to $3,149.60.

Bullion rose more than 27% last year as several bullish factors, including a favourable monetary policy backdrop and robust central bank buying, combined to send investors towards the safe-haven asset.

On technical charts, gold's Relative Strength Index stands above 77, indicating the market is overbought, but analysts have said momentum has defied any standard logic of where prices are positioned.

"Gold's bull run is the reflection of the anxiety around tariffs. The fears that these tariffs are going to be growth constraining, potentially leading to lower economic outcomes," is supporting gold," Nitesh Shah, commodities strategist at WisdomTree, said.

Trump is expected to announce reciprocal tariffs on April 2, while automobile tariffs will take effect on April 3.

A combination of other factors, including rate cuts bets, central bank purchases and demand for exchange-traded funds have all helped non-yielding bullion's record run.

"Gold prices could be trading around $3,500 about this time next year and that reflects sentiment towards the metal remaining strong, primarily with all the geopolitical risks still there," Shah said.

On Sunday, Trump said he was "pissed off" at Russian President Vladimir Putin and would impose secondary tariffs of 25%-50% on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.

Source : Reuters