PRECIOUS-Gold scales new high on Trump tariff concerns

Updates with market hitting a record high

By Anushree Mukherjee

Feb 20 (Reuters) - Gold prices rose to a record high on Thursday as investors turned to bullion for safety on fears U.S. President Donald Trump's tariff plans would stoke inflation and a global trade war.

Spot gold XAU= was up 0.5% at $2,945.83 an ounce, as of 0621 GMT, after hitting a record high of $2,947.11 earlier in the session.

Bullion has risen 12% so far this year and hit a fresh peak for the tenth time on Trump tariff fears.

U.S. gold futures GCcv1 gained 0.9% to $2,963.80 on Thursday.

"Uncertain outlooks for both global trade and inflation are proving to be conducive for gold and are acting to bring the $3,000 level within range," said Tim Waterer, chief market analyst at KCM Trade.

Since his inauguration, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminium. He said on Wednesday he would announce tariffs related to lumber, cars, semiconductors and pharmaceuticals "over the next month or sooner."

Minutes of the Federal Reserve's last policy meeting showed on Wednesday that Trump's initial policy proposals raised concerns about higher inflation and affirmed a continued pause on rate cuts.

Despite chances of fewer rate cuts this year, market participants maintain their overall bullish outlook for gold.

"Gold has and should continue to benefit from robust physical market demand, underpinned by resilient central bank purchases and as physical gold ETFs transition from sellers to marginal buyers," said Trevor Yates, analyst at Global X. GOL/AS

Gold is seen as a hedge against geopolitical risks and inflation, but higher interest rates dampen the non-yielding asset's appeal.

"If we look at potential risks which could slow gold prices down, safe-haven demand could dry up somewhat if a peace deal moves closer to fruition between Russia and Ukraine," Waterer said.

Trump denounced Ukrainian President Volodymyr Zelenskiy as a "dictator" on Wednesday and warned he had to move quickly to secure peace or risk losing his country.

Spot silver XAG= firmed 0.5% to $32.88 an ounce. Platinum XPT= gained 0.4% to $976.00, while palladium XPD= rose 0.6% to $973.87.