Gold prices are gaining positive traction for the third consecutive day on Friday, approaching the upper end of their weekly range amid escalating trade tensions.
In Dubai, gold rates saw an uplift, with 24-carat gold rising AED2.5 to AED400.25, while 22-carat gold gained AED2.25 to AED370.75. Additionally, 21-carat gold rose AED2.25 to AED355.5, and 18-carat gold increased AED1.75 to AED304.5.
Globally, spot gold gained 0.5 percent to $3,333.76 as of 4:47 GMT. Meanwhile, U.S. gold futures were up 0.61 percent at $3,345.90. Over the past 30 days, gold prices have recorded a 0.36 percent decline as tensions in the Middle East eased.
In a dramatic escalation of trade wars, U.S. President Donald Trump this week issued notices to a slew of trading partners, outlining individual tariff rates starting August 1 in the absence of any trade deals. This situation keeps investors on edge and takes its toll on global risk sentiment, which, in turn, is viewed as a key factor acting as a tailwind for the safe-haven precious metal.
Trump introduces new tariffs
Meanwhile, traders scaled back their expectations for an immediate interest rate cut by the Federal Reserve following the release of the upbeat U.S. monthly jobs report last week. This assists the U.S. Dollar (USD) to remain strong near its highest level in more than two weeks reached on Thursday, potentially holding back traders from making aggressive bullish bets around the non-yielding gold price. Thus, it may be prudent to wait for strong follow-through buying before positioning for any further near-term appreciating move for the XAU/USD pair.
U.S. President Donald Trump announced a 35 percent tariff on Canadian imports, effective August 1. This decision was conveyed in a letter, marking the latest in a series of over 20 similar tariff notices Trump has issued since Monday. This follows Wednesday’s announcement of a 50 percent tariff on U.S. copper imports and continues to drive safe-haven flows toward the gold price. Minutes from the Federal Reserve’s June 17-18 policy meeting revealed that most policymakers remain worried about the risk of rising inflationary pressure due to Trump’s aggressive trade policies. The minutes also indicated that only a couple of officials felt interest rates could be reduced as soon as this month, helping the U.S. Dollar to maintain its strength near a two-week high set on Thursday.
Jobless claims show positive trend
On the economic data front, the U.S. Department of Labor (DOL) reported that initial jobless claims fell to 227K for the week ending July 5, which was less than the estimates and the previous month’s downwardly revised reading of 232K. This, along with stronger U.S. employment details released last Thursday, points to a resilient U.S. labor market and signals no urgency for the Fed to cut rates. Meanwhile, San Francisco Fed President Mary Daly stated that monetary policy is still restrictive and that it’s time to consider adjusting the interest rate. She added that tariffs aren’t as high as previously expected and that economic fundamentals support a move toward lower rates at some point.
Separately, Fed Board of Governors member Christopher Waller noted that tariff inflation effects are likely to be short-lived and that a rate cut would not be politically motivated. Waller, who is seen as a potential favorite to replace Powell in 2026, made another push for an early interest rate cut in July. In contrast, St. Louis Fed President Alberto Musalem remarked that it was too soon to determine if tariffs would have a one-off or more persistent impact on inflation. He added that the economy is in a good place and it is crucial for the Fed to keep long-term inflation expectations anchored.
There isn’t any relevant market-moving economic data due for release from the U.S. on Friday, leaving the USD at the mercy of comments from influential FOMC members. Additionally, trade-related developments should contribute to providing some impetus to the XAU/USD pair on the last day of the week. At current levels, the commodity remains on track to end the week on a flattish note.
Decline in U.S. dollar supports gold
Gold prices rose on Thursday as the U.S. dollar and bond yields declined, while investor focus remained on trade negotiations as U.S. President Donald Trump expanded tariff measures with new announcements.
In Dubai, gold rates experienced an uplift, with 24-carat gold rising AED2.5 to AED400.25 and 22-carat gold gaining AED2.25 to AED370.75. Additionally, 21-carat gold rose AED2.25 to AED355.5, and 18-carat gold was up AED1.75 to AED304.5.
Globally, spot gold gained 0.19 percent to $3,318.82 as of 4:47 GMT. Meanwhile, U.S. gold futures were up 0.19 percent at $3,327.17. Over the past 30 days, gold prices have recorded a 0.36 percent decline as tensions in the Middle East eased. Supporting gold prices, the U.S. dollar index declined 0.13 percent to 97.43, while the yield on benchmark 10-year U.S. Treasury notes retreated from a three-week high. Lower bond yields reduce the opportunity cost of holding non-yielding bullion, while a weaker dollar makes gold cheaper for holders of other currencies.
Gold prices rose after Trump intensified his tariff campaign on Wednesday by announcing a 50 percent tariff on U.S. copper imports and a 50 percent levy on Brazilian goods, both scheduled to take effect on August 1. He also issued tariff notices to seven smaller trading partners, adding to the 14 notices already sent earlier in the week, including to key allies South Korea and Japan, with 25 percent tariffs also set for August 1 unless deals are reached.
