Gold prices increased on Friday following sharp losses in the previous session, positioning them for a weekly gain due to concerns over the U.S. fiscal deficit and Washington’s upcoming tariff decision.
In Dubai, gold rates rose, with 24-carat gold rising AED1 to AED402.75 and 22-carat gold gaining AED1 to AED372.75. Additionally, 21-carat gold rose AED1 to AED357.50, and 18-carat gold was up AED1 to AED306.25.
Spot gold rose by 0.5 percent to $3,341.34 an ounce (currently trading above $3,340), while gold futures for August climbed 0.2 percent to $3,349.52 per ounce by 00:10 ET (04:10 GMT) (currently trading above $3,350). The bullion had fallen nearly 1 percent on Thursday after a strong U.S. jobs report diminished the likelihood of a Federal Reserve rate cut this month. Nevertheless, it remains on track for a weekly increase of 1.8 percent, following two consecutive weeks of declines.
New tariff letters to major economies
President Trump stated on Thursday that Washington will begin issuing formal letters to major economies as early as Friday, outlining new U.S. export tariff rates. He indicated that the U.S. would bypass lengthy negotiations with over 170 countries and instead apply unilateral flat tariff rates ranging from 20 percent to 30 percent. To date, the U.S. has only signed trade deals with the U.K. and Vietnam, along with a limited framework with China. Expectations of heightened global trade friction and uncertainty surrounding tariff rates have provided some support for gold.
Strong job data lowers Fed rate cut expectations
The nonpartisan Congressional Budget Office estimates that this bill would add $3.4 trillion to the existing $36.2 trillion national debt. However, gold prices fell on Thursday after data indicated that the U.S. economy added more jobs than expected in June, signaling ongoing economic resilience. This robust data prompted markets to lower expectations for a Fed rate cut this month. Higher interest rates diminish gold demand by making interest-bearing assets more appealing and increasing the opportunity cost of holding non-yielding gold.
U.S. dollar index dips slightly
The U.S. Dollar Index dipped by 0.1 percent during Asian trading, while largely maintaining the strong gains seen in the previous session due to the robust U.S. jobs report. Platinum futures rose by 0.5 percent to $1,385.80 per ounce, whereas silver futures declined by 0.3 percent to $37.00 per ounce. Benchmark copper futures on the London Metal Exchange edged down by 0.3 percent to $9,923.65 per ton, while U.S. copper futures fell by 0.4 percent to $5.115 per pound.
