Spot gold was flat at $2,987.51 an ounce, as of 0330 GMT. Earlier in the session, safe-haven bullion hit a record high of $2,990.09, and hovered near the key milestone of $3,000.

Bullion is on track for a second consecutive weekly increase, with a 2.5% gain so far.

U.S. gold futures rose 0.3% to $3,000.20.

"The risk-off market stance reflects investors' expectations that trade tensions are likely to get worse before it cools, and are turning to safe-haven gold once again as a hedge against portfolio volatility," said IG market strategist Yeap Jun Rong.

In the latest development of U.S. President Donald Trump's multi-front trade war, the European Union retaliated to blanket U.S. tariffs on steel and aluminum by imposing a 50% tax on American whiskey exports. In response, the president threatened on Truth Social to impose a 200% tariff on European wine and spirit imports.

"The psychological $3,000 level is now coming into view for gold prices, and as we approach the second quarter, where reciprocal tariffs could trigger another wave of market turbulence, gold remains a compelling safe-haven asset in an environment where alternatives are scarce," Rong said.

Trump's tariffs are widely expected to fuel inflation and economic uncertainty, and have prompted gold to reach multiple record highs in 2025.

Gold is seen as a hedge against political risks and inflation.

Investors now await the Fed's monetary policy meeting, scheduled for next Wednesday. The central bank is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range.

Non-yielding bullion thrives in a low-interest-rate environment.

Meanwhile, Russian President Vladimir Putin said on Thursday Russia supported a U.S. proposal for a ceasefire in Ukraine in principle, but sought a number of clarifications and conditions that appeared to rule out a quick end to the fighting.

Spot silver was steady at $33.80 an ounce, platinum eased 0.2% to $992.30, and palladium gained 0.7% to $964.19.