Gold breached the key US$3,200 (HK$24,960)/oz level for the first time to scale a new peak on Friday, fuelled by a weaker dollar and an escalating trade war that sent investors rushing toward safe-haven assets.

Spot gold rose 1.3 percent at US$3,216.48 an ounce as of 0230 GMT. Bullion scaled an all-time peak of US$3,219.73 earlier in the session, gaining over 5 percent for the week.

US gold futures climbed 1.9 percent to US$3,236.00.

"The rapid weakening of the US dollar seems to be the main driver of gold's rebound at the moment. That seems to reflect an ongoing exodus from USD-based assets, with stocks and bonds' selloff amid tariff policy uncertainty," said Ilya Spivak, head of global macro at Tastylive.

The dollar dropped, making greenback-priced bullion cheaper for overseas buyers.

Major stock indexes also fell after US President Donald Trump ratcheted up tariffs on Chinese imports to 145 percent, but hit a 90-day pause on previously announced tariffs for dozens of countries.

China has been matching each of Trump's tariff hikes with increases of its own, sparking fears that Beijing could push tariffs on the US beyond the current 84 percent.

"US$3,500 is the next round number people will be looking at. I suspect we won't get there immediately or without bumps along the way," Capital.com's financial market analyst Kyle Rodda said.

Apart from tariffs, central bank demand, expectations of interest rate cuts by the Federal Reserve, geopolitical instability in the Middle East and Europe, and increased flows into gold-backed exchange-traded funds also fuelled the metal's rally this year.

US consumer prices fell unexpectedly in March but inflation risks are tilted to the upside, data showed.

Traders now bet that the Fed will resume cutting rates in June and probably reduce by a full percentage point by the end of 2025.

Spot silver eased 0.2 percent to US$31.13 an ounce and platinum fell 0.4 percent to US$934.20. Palladium rose 0.7 percent to US$914.70.

Reuters

Gold bolts past US$3,200 on dollar slide, safe-haven flows