Gold for August delivery delivery was last seen up US$63.50 to US$3,387.10 per ounce, pressing close to the April 21 record high of US$3,425.30.

Gold's rise comes as Trump said in a social media post that trade talks with the EU are going nowhere and he is "recommending a straight 50% tariff" on the bloc starting on June 1. He also threatened to impose a 25% levy on Apple's (AAPL) imports if it does not begin manufacturing iPhones in the United States, reigniting trade worries that were somewhat calmed after the Administration partially backed down from a tariff battle with China earlier this month.

European stock markets were broadly lower following Trump's posts, with futures pointing to a much lower open for U.S exchanges. Trump's threats also come as the House of Representatives passed a tax bill that is expected to hike U.S. budget deficits and debt.

"Gold is heading for its best week in a month on raised US fiscal debt concerns following a jump in US long-end yields in response to Trump's tax bill, which will swell an already elevated US debt pile," Saxo Bank noted.

The dollar was sharply lower early, dropping for the fourth time in five days, with the ICE dollar index last seen down 0.63 points to 99.33.

Treasury yields dropped as traders move away from risk assets. The U.S. two-year note was last seen paying 3.925%, down 7.6 basis points, while the yield on the 10-year note was down 6.4 points to 4.476%.

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