Gold prices fell in Asian trading on Friday, weighed down by a resilient U.S. dollar and shifting market sentiment. Spot gold dropped 0.7% to $3,293.44 an ounce, while August gold futures declined 0.8% to $3,316.67 an ounce as of 00:44 ET (04:44 GMT). This marks a weekly loss of over 1%, despite some initial gains earlier this week.
The dollar’s gains stemmed from signs of economic stability in the U.S. and investor anticipation of PCE price index data, the Federal Reserve’s favored inflation gauge, due later in the day. Meanwhile, gold’s safe-haven appeal has been undermined by shifting headlines around President Donald Trump’s trade tariffs, which have yo-yoed between enforcement and suspension.
Tariff Whipsaw Fails to Boost Gold
Gold’s trajectory this week was characterized by mixed signals from U.S. trade policy and volatile market sentiment. While a U.S. appeals court temporarily reinstated Trump’s tariff agenda on Thursday, this decision failed to offset earlier declines in gold prices.
Key factors contributing to gold’s dip include:
- Dollar strength, fueled by signs of U.S. economic resilience and cautious optimism
- Profit-taking pressure after spot gold reached record highs in May
- Limited gains from tariff reinstatement, as investors speculated Trump may backtrack again
Interestingly, a phrase mocking Trump’s indecision on tariffs—“TACO” (Trump Always Chickens Out)—circulated on social media, reflecting skepticism about his resolve.
U.S. Inflation Data in Focus
As the week closed, attention turned to U.S. economic data, particularly the Personal Consumption Expenditures (PCE) price index. This metric is expected to show inflation staying elevated in April, with core PCE likely holding above the Federal Reserve’s 2% target.
A strong PCE reading could bolster the dollar further, pressuring gold and broader commodity prices. Additionally, recent GDP data showed the U.S. economy contracted less than previously estimated, supporting the dollar’s upward move.
Other metals also retreated:
- Platinum futures dropped 0.6% to $1,074.85/oz
- Silver futures fell 1% to $33.075/oz
- Copper futures on the London Metal Exchange slipped 0.1% to $9,564.40/ton, while U.S. copper futures lost 0.4% to $4.6535/pound
Traders now await the PCE data for insights into potential Fed rate moves, which could further sway gold prices in the days ahead.