Gold on Track for Seventh Weekly Gain on Trade War Fears
Gold was poised for its seventh straight weekly rise, driven by fears of a global trade war in the wake of U.S. President Donald Trump's push for reciprocal tariffs, although profit-taking sent prices lower on Friday.
Spot gold was down 0.3% at $2,919.69 an ounce as of 10:00 a.m. ET (1500 GMT), but remained on track for a weekly gain of more than 2%. Bullion hit a record peak of $2,942.70 on Tuesday.
U.S. gold futures fell 0.2% to $2,938.30.
"We're just seeing some profit taking from the shorter term futures traders after being higher overnight," said Jim Wyckoff, a senior market analyst at Kitco Metals.
There is still a bullish trend in gold driven by several factors like tariffs, underlying inflation, and a weaker U.S. dollar, with a growing shift from paper to physical gold further fuelling this trend, said Alex Ebkarian, chief operating officer at Allegiance Gold.
On Thursday Trump directed his economic team to formulate plans for reciprocal tariffs on every country that imposes taxes on U.S. imports. This potentially inflationary move could drive further safe-haven demand for gold, a traditional hedge against rising prices and geopolitical uncertainty.
Meanwhile, Thursday's U.S. PPI report eased some concerns about inflation in the world's largest economy after a hotter than expected consumer prices report earlier in the week.
Traders expect the Federal Reserve will not cut interest rates until September because of concerns over high inflation. A drop in jobless claims signalled the continued resilience of the labour market.
In other precious metals, spot silver gained nearly 2.2% to $33.06 an ounce, hitting its highest level since Oct. 31, 2024 earlier in the session.
"We're actually seeing an increase in demand for silver on year over year and supply is dropping," said Ebkarian, adding that the slight increase in gold prices has boosted the demand for the more affordable silver among retail investors.
Platinum lost 0.4% to $990.95 while palladium dipped by 0.8% to $986.25.
All three metals were on track for weekly gains.
Source : Reuters
