Gold fell more than 3% on Friday, erasing gains from earlier in the week, as investors sold bullion to cover losses from a broader market rout as escalating trade tensions stoked fears of a global recession.

Spot gold fell 2.9% to $3,024.2 an ounce, after hitting a session low of $3,015.29 earlier in the session. It hit a record high of $3,167.57 on Thursday. For the week, gold is down 1.9%.

U.S. gold futures settled 2.8% lower at $3,035.40.

On the technical front, spot gold managed to hold above its 21-day moving average of $3,023.

"We tend to view gold as a liquid asset that is used to meet margin calls elsewhere, so it's not unusual for it to sell off after a risk event given the role it can play in a portfolio," said Suki Cooper, an analyst at Standard Chartered. "Gold is behaving in line with historical trends."

Global stocks fell for a second straight day, with the S&P 500 and Nasdaq Composite each down about 5%, after China announced additional tariffs of 34% on all U.S. goods from April 10, in response to reciprocal tariffs announced by U.S. President Donald Trump this week.

However, gold is still up about 15.3% this year, driven by robust central bank buying and its overall appeal as a safe haven against economic and geopolitical uncertainty.

Despite the volatility, "gold remains a safe haven for many investors," said Matt Simpson, a senior analyst at City Index.

Meanwhile, Federal Reserve Chairman Jerome Powell said Trump's new tariffs were "bigger than expected" and the economic impacts, including higher inflation and slower growth, likely will be as well.

The dollar index rose 0.7% against its rivals. A stronger dollar makes dollar-priced bullion more expensive for overseas buyers.

Traders also weighed better-than-expected U.S. jobs data.

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

Gold tends to thrive in a low-interest-rate environment.

Silver fell 7.3% to $29.54 an ounce and was headed for its worst week since September 2020. Platinum fell 3.6% to $918.35 and palladium fell 2% to $909.75, both headed for weekly losses. (Newsmaker23)

Source: CNBC