Gold extended its rally on Friday, surging past the $3,000 mark in early trading, driven by escalating trade tensions, economic uncertainty, and expectations of a Federal Reserve rate cut.

Spot gold, as tracked by the SPDR Gold Trust (NYSE:GLD), traded at $3,004 per ounce at 7:30 a.m. ET, rising 1.78% and marking its third consecutive session of gains.

The VIX index, which is also known as the fear gauge, is up 63% in the last 12 months and up 39% year-to-date.

Related: US Producer Inflation Stalls In February As Services Costs Drop, Egg Prices Skyrocket

Rising recession risks, renewed trade war threats from former President Donald Trump, and unusual market dynamics fuel the rally. Analysts point to hidden buyers and increasing demand for safe-haven assets as key drivers.

Gold, which is also seen as a safe-haven asset, usually trades in an inverse relationship with the VIX. When the market experiences fear, the money moves in gold for safety.

February’s weaker-than-expected PPI and CPI reports raised hopes for 2025 rate cuts, but economists caution that rising tariffs and volatile food prices could challenge ongoing disinflation trends.

Experts warn that markets remain highly reactive to geopolitical developments, with inflation volatility, trade tensions, and shifting global alliances creating uncertainty about the economic path ahead.

Meanwhile, Bitcoin is underperforming as gold surged to a record high, casting renewed doubts on its status as “digital gold.”

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