Gold prices held steady in Asian trading Friday, consolidating after slipping from this week’s record highs. The move came as U.S. President Donald Trump’s sweeping tariff announcement rattled markets, fueling demand for traditional safe havens.
Spot gold was unchanged at $3,749.30 an ounce, while U.S. gold futures edged up 0.2% to $3,778.90 by early morning trading. Prices briefly touched an all-time high of $3,791.11 earlier in the week before pulling back.
The yellow metal remains on track for a 1.7% weekly gain, its sixth straight advance. However, the rally has been tempered by a rebound in the U.S. dollar, which capped broader commodity gains.
Tariffs, Rates, and Dollar Shape Outlook
The immediate driver of gold demand has been Trump’s announcement of new tariffs, including a 100% duty on pharmaceutical imports. The measures deepened economic uncertainty and spurred risk-off sentiment across equities, redirecting flows into safe-haven assets.
At the same time, robust U.S. economic data clouded prospects for interest rate cuts.
- GDP growth for Q2 surprised to the upside.
- Weekly jobless claims showed modest improvement.
- Fed officials cautioned about risks tied to sticky inflation and labor market weakness.
Federal Reserve Chair Jerome Powell stressed the challenge of balancing inflation control with slowing employment, leaving investors unsure about the pace of policy easing. Meanwhile, the dollar recovered from a three-year low, weighing on metals priced in greenbacks.
Inflation Data Could Shift Market Sentiment
Attention now turns to the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, due Friday. Markets expect both headline and core readings to remain above the Fed’s 2% target.
Persistent inflation would weaken the case for aggressive rate cuts, despite Trump’s renewed demand for rates as low as 2%. The president also escalated his criticism of Powell, who has largely ignored such calls.
Beyond gold, the broader metals complex traded mixed:
- Platinum gained 0.9% to $1,541.85/oz.
- Silver slipped 0.7% to $44.87/oz.
- Copper futures were flat on the LME at $10,258.65/ton, while COMEX copper eased 0.2% to $4.78/lb.
Conclusion:
With trade tensions rising and inflation data in focus, gold sits at the crossroads of geopolitical risk and monetary policy uncertainty. A hotter-than-expected PCE print could strengthen the dollar and stall momentum, while signs of easing inflation may reopen the path toward fresh record highs.