Gold prices plunged nearly 2% on Friday as traders liquidated their bullion positions amid a broad market sell-off, after China retaliated with new tariffs against U.S. President Trump's massive levies.

Spot gold fell 1.9% to $3,053.98 an ounce by 10:05 a.m. EDT (1405 GMT). It hit a record high of $3,167.57 on Thursday.

U.S. gold futures fell 1.6% to $3,072.10.

Investors sold some of their gold holdings to cover losses in other asset classes, driven by margin calls, analysts said.

"We still see room for further upside risk, given the current risk-off environment... we expect prices to hit further record highs in the second quarter," Standard Chartered analyst Suki Cooper said. The bank's second-quarter gold price forecast is $3,300/oz.

China's finance ministry announced that it will impose additional tariffs of 34% on all U.S. goods starting April 10, in response to reciprocal tariffs announced by Trump this week.

Global stocks plunged for a second straight day after the news, deepening losses amid fears of a global recession.

Friday's Labor Department report showed the U.S. economy added 228,000 jobs in March, compared with the 135,000 expected by economists polled by Reuters. Meanwhile, the unemployment rate was at 4.2% compared with expectations of 4.1%.

"I think (the NFP data) will help the Federal Reserve's efforts to continue to delay rate cuts," said Alex Ebkarian, chief operating officer at Allegiance Gold.

While gold is considered a hedge against uncertainty, it tends to thrive in a low-interest-rate environment. The market is currently pricing in a 120-bps Fed rate cut by the end of the year, starting in June.

Investors are also looking ahead to a speech by Federal Reserve Chairman Jerome Powell later in the day for clues on monetary policy.

Spot silver fell 4.9% to $30.32 an ounce and headed for its worst week since September 2020.

Platinum fell 2.8% to $925.55 and palladium dropped 1.4% to $915.21, both headed for weekly losses. (Newsmaker23)

Source: Reuters