Gold was shining bright Monday, as investors monitored the tariff front for expected developments this week.

SPDR Gold Shares , an exchange-traded fund that buys physical gold, rallied 1.7% Monday to close at a record high, according to Dow Jones Market Data. The ETF's sharp rise Monday follows six straight weeks of gains, its longest weekly winning streak since 2020, FactSet data show.

"Gold bars are bought as a hedge" against tariff-related downside risks to stocks as well as U.S. and global economic growth, commodity analysts at Citigroup said in a research note on Friday after the U.S. stock market's close. "In precious metals, we see gold moving higher very near term" to $3,000 per ounce, they wrote.

On Friday, President Trump said he was planning to announce "reciprocal" tariffs, and then over the weekend indicated that tariffs on steel and aluminum imports are also coming.

The U.S. stock market fell on Friday as investors worried about the potential for tariffs to place a drag on the economy and increase prices for consumers at the same time that the Federal Reserve is continuing its effort to bring inflation down to its 2% target.

"We continue to see gold as an effective portfolio hedge and diversifier, and believe an allocation of around 5%" within a balanced, U.S. dollar portfolio is "optimal," Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, said in a note Monday.

While Marcelli warned in the note that "highly aggressive U.S. tariffs would almost certainly trigger retaliation by U.S. trading partners, and there are risks of a tit-for-tat ratcheting up of measures," she said that UBS Global Wealth Management's "base case is a scenario of 'selective tariffs,' which have the potential to dent, but not derail, U.S. economic growth."

She expects the S&P 500 SPX to rise to 6,600 by the end of the year, but said "the journey up is likely to be accompanied by heightened volatility." The S&P 500 fell Friday to 6,025.99, with all three major U.S. stock indexes booking weekly losses.

U.S. stocks rebounded Monday, with the Dow Jones Industrial Average DJIA closing 0.4% higher, the S&P 500 gaining 0.7% and the technology-heavy Nasdaq Composite COMP advancing a sharp 1%.

The SPDR S&P Metals & Mining ETF XME, which provides exposure to that segment of the U.S. stock market, surged 3.8% on Monday.

'Trade-war crossfire'

Gold (GC00) is beating the U.S. stock and bond markets so far this year, with the yellow metal rising to a fresh peak on Monday .

"Gold has soared to another record high today amid a further ratcheting up in trade tensions," said Joe Maher, assistant economist at Capital Economics, in a note Monday. "Concerns that gold may get caught in the trade-war crossfire may also have led U.S. investors to buy up gold in order to get ahead of any future tariffs that might affect U.S. gold imports."

The SPDR Gold Shares ETF has surged 10.8% this year through Monday, widely outperforming the S&P 500's 3.1% gain so far in 2025, according to FactSet data. The iShares Core U.S. Aggregate Bond ETF AGG finished Monday with a year-to-date gain of 0.9% on a total-return basis.

In the bond market, the yield on the 10-year Treasury note BX:TMUBMUSD10Y edged up Monday to 4.492%, according to Dow Jones Market Data. That's after rising on Friday, as traders braced for new tariffs while assessing a University of Michigan survey that showed a jump in consumers' inflation expectations over the next year.

Beyond investors' fears that tariffs risk sparking trade wars, gold prices of late have been supported by central banks buying the yellow metal, as there may be "a desire among some central-bank reserve managers to limit their exposure to sanctions from the U.S. and its allies," Maher said.

Precious metals, which Capital Economics categorizes as "safe" assets, have been one of the top-performing asset classes so far this year through Friday, a chart in Maher's note shows.

But gold's big rally "may falter before too long," according to Maher.

"We think central-bank reserve diversification will only be slow-moving," he said, referring to central banks' gold purchases. "And some central banks (and other investors) may be put off by gold's sky-high price."