Gold prices recorded their first weekly decline this week as bulls chose to take profits after hitting a record high. On Thursday, gold prices fell by 1.3% to around $2,870 per ounce, primarily due to a stronger dollar and comments from Trump regarding tariff policies. Trump announced additional tariffs on goods from Canada, Mexico, and major Asian countries, reducing market safe-haven demand and further pressuring gold prices. The dollar rose by 0.6%, decreasing the appeal of dollar-denominated gold for foreign investors, leading to a drop in international demand.
Despite this, gold reached a record high of $2,956.19 per ounce earlier this week, reflecting market unease over Trump's tariff policies. As a safe-haven asset, gold was fully showcased in times of heightened global trade tensions and geopolitical risks. Concerns about U.S. inflation and trade wars boosted the safe-haven demand for gold.
Investors are now focusing on the upcoming U.S. core Personal Consumption Expenditures (PCE) price index, which is typically the Federal Reserve's preferred inflation gauge. The index is expected to fall to its lowest level since June, and if it meets expectations, it could further fuel market expectations of a Fed rate cut, benefiting gold.
According to market analysis, gold prices have cumulatively fallen by about 2% this week, with the dollar index remaining stable. Prices of other precious metals such as silver, platinum, and palladium have also seen slight declines. As U.S. economic data continues to be released, gold could still benefit from future uncertainties.
