NEW YORK: Gold prices fell over 1% on Friday due to profit-taking, although they remained poised for their seventh straight weekly rise, driven by fears of a global trade war in the wake of US President Donald Trump’s push for reciprocal tariffs.
Spot gold fell 1.6% to $2,882.99 an ounce as of 01:40 p.m. ET (1840 GMT), but remained on track for a weekly gain of 0.8%. Bullion hit a record peak of $2,942.70 on Tuesday.
US gold futures settled 1.5% lower at $2,900.70. “There are some technical factors in play; the inability to get the all-time high set on Tuesday leaves a potential double top, and we see some profit-taking ahead of the weekend,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
There is still a bullish trend in gold driven by several factors like tariffs, underlying inflation, and a weaker US 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 US imports. This potentially inflationary move could drive further safe-haven demand for gold, a traditional hedge against rising prices and geopolitical uncertainty.
Meanwhile, US retail sales dropped by the most in nearly two years in January, suggesting a sharp slowdown in economic growth early in the first quarter. However, 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 fell 0.3% to $32.27 an ounce, after hitting its highest level since October 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 1% to $985.04, while palladium dipped by 1.1% to $982.9. All three metals were on track for weekly gains.
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