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Gold prices hit a record high on Friday and were set for a fifth consecutive weekly gain, as investors flocked to the safe-haven metal due to heightened U.S. tariff concerns, while awaiting a key inflation report due later in the day for further direction.

Spot gold was up 0.1% at $2,797.48 per ounce, as of 0216 GMT, rising about 1% so far in the week. Earlier in the session, prices hit an all-time high of $2,799.71.

President Donald Trump said on Thursday that the United States would impose a 25% tariff on imports from Mexico and Canada, repeating his warning to the two countries.

Gold is considered a safe investment during geopolitical and economic turmoil and tends to thrive in a low interest rate environment.

"Repeated tariff threats have fuelled safe-haven flows into gold... any downside surprise in the inflation reading could suggest greater policy flexibility for the Fed, potentially bringing forward rate-cut expectations and providing further support for gold," IG market strategist Yeap Jun Rong said.

The December U.S. personal consumption expenditures (PCE) report, due at 1330 GMT, will be scanned for further clues on the interest rate trajectory.

The Federal Reserve kept rates steady on Wednesday and Chair Jerome Powell said inflation and jobs data would determine when another easing would come.

Amid concerns about Trump's tariff plans, 12.9 million troy ounces of gold have been delivered to COMEX-approved warehouses since late November, raising stocks there by 73.5% to 30.4 million ounces, the highest since July 2022.

Further gains could be in store for gold if tariff threats move from being just a bargaining concept to an economic reality, said Tim Waterer, chief market analyst at KCM Trade, adding that prices could ascend to new highs north of the $2,800 level.

Spot silver shed 0.7% to $31.45 per ounce, platinum steadied at $967.22, and palladium fell 0.5% to $983.92.

Silver and platinum were poised for weekly gains, while palladium was set for a loss.