Gold prices were set for their worst weekly decline in more than two months on Friday as trade tensions eased, impacting safe-haven demand. The market focus today is on the U.S. non-farm payrolls report for more insight into the Federal Reserve’s policy path.
In Dubai, gold rates recovered some of the previous session’s losses, with 24-carat gold rising AED4 to AED391.5 and 22-carat gold gaining AED3.25 to AED362.25. Additionally, 21-carat gold climbed AED3.25 to AED347.5, while 18-carat gold ticked up AED2.75 to AED297.75.
Globally, spot gold gained 1.18 percent to $3,254.94, as of 4:08 GMT, while U.S. gold futures rose 1.28 percent to $3,263.44. Bullion has lost more than 2 percent so far this week, the steepest weekly fall since late February. Despite the latest weekly decline, gold has gained close to 4 percent in the last 30 days, rising to an all-time high of $3,500.05 on April 22.
U.S.-China trade deal prospects weigh on gold prices
Gold prices rose today despite reports that the United States has approached China to seek talks over President Donald Trump’s 145 percent tariffs. China’s Commerce Ministry said on Friday that Beijing is open for discussions, signalling a potential de-escalation in the trade war.
The easing of trade tensions between the U.S. and China amid hopes for a trade deal is weighing on gold prices. Bullion, a traditional hedge against political and financial unrest, soared to a fresh record high late last month as investors sought safety from global economic turmoil.
“Renewed optimism about easing tensions between the U.S. and China boosted risk appetite. Additionally, the dollar climbed to a two-week high, further dampening demand for the safe-haven metal,” stated Vijay Valecha, chief investment officer, Century Financial.
The dollar, however, turned cautious amid bets for more aggressive policy easing by the Federal Reserve and ahead of the U.S. nonfarm payrolls report. The U.S. dollar index dipped 0.21 percent to 100.04.
Fed rate cut hopes limit gold’s decline
Traders raised their bets that the U.S. central bank will deliver four quarter-point interest rate cuts by the year-end after data released this week showed that the U.S. economy unexpectedly contracted for the first time since 2022. Moreover, the personal consumption and expenditure (PCE) price index pointed to signs of easing inflation.
“Expectations of more aggressive monetary easing by the Federal Reserve, fueled by an unexpected contraction in U.S. GDP and signs of cooling inflation, could weigh on the USD. This outlook discourages traders from making new bearish bets on non-yielding gold, helping to limit deeper losses,” added Valecha.
U.S. manufacturing contracted for the second consecutive month in April as tariffs on imported goods strained supply chains, keeping prices at the factory gate elevated and encouraging some firms to lay off workers.
The market now awaits the release of the U.S. non-farm payrolls report at 12:30 GMT for further direction on the Federal Reserve’s policy path. Non-farm payrolls likely increased by 130,000 jobs in April after rising by 228,000 in March, a Reuters survey showed. The unemployment rate is estimated to remain unchanged at 4.2 percent.
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Other precious metals
In line with the rise in gold prices, the precious metals market saw prices recover on Friday. Spot silver rose 0.80 percent to $32.66, platinum gained 1.05 percent to $968.60, and palladium edged up 1.14 percent to $951.11.
