Gold prices declined on Friday from a new record high they hit in the previous session. However, they stayed on track for their eighth consecutive weekly gain as concerns over U.S. President Donald Trump’s tariff threats supported safe-haven demand.
In the UAE, gold rates saw a decline, with 24-carat gold losing AED0.5 to AED353 and 22-carat gold falling AED0.75 to AED328.25. Additionally, 21-carat gold declined by AED0.5 to AED314.75 and 18-carat gold ticked down AED0.5 to AED269.75.
Globally, spot gold fell 0.44 percent to $2,927.55 per ounce as of 5:42 GMT. Bullion gained more than 1 percent so far this week, rising to an all-time high of $2,954.69 on Thursday.
Meanwhile, U.S. gold futures dipped 0.39 percent to $2,942.31.
Trump proposes new tariffs
Gold prices maintained some of the gains they made from surging to a new record high this week as persisting U.S. trade uncertainties reinforced the yellow metal’s appeal as a hedge against inflation and economic tensions.
Earlier this week, Trump said he would announce new tariffs in the next month or even sooner, adding lumber and forest products to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals. Since taking office on January 20, Trump has imposed an additional 10 percent tariff on Chinese imports and a 25 percent tariff on steel and aluminum.
Fed officials warn of rising inflation
U.S. Federal Reserve officials have sounded their concerns, noting that Trump’s policies are inflationary. Fed Governor Adriana Kugler said on Thursday that given the balance of risks, it is appropriate to hold the federal funds rate in place for some time. St. Louis Fed President Alberto Musalem also warned on Thursday that rising inflation expectations combined with the risk of stubborn stagflation could create a double challenge for the U.S. economy.
However, Atlanta Fed president Raphael Bostic had a more dovish tone and sees room for two more rate cuts this year, but noted that a lot depends on the evolving economic conditions. Gold is seen as a hedge against geopolitical risks and inflation, but higher interest rates dampen the non-yielding asset’s appeal and prices.
U.S. dollar near lowest level since December 10
The U.S. dollar remained near its lowest level since December 10 amid bets for more interest rate cuts by the Federal Reserve. The dollar index gained 0.11 percent to 106.49 on Friday, but a weaker dollar makes bullion more attractive for other currency holders, thus, supporting gold prices this week.
Amid a weaker U.S. dollar, gold prices will also remain supported by robust physical market demand and resilient central bank purchases. Goldman Sachs recently raised its gold price forecast to $3,100 per ounce from $2,890 per ounce for the end of 2025, citing structurally higher central bank demand.
UBS also updated its gold price forecast, projecting that the yellow metal could reach a high of over $3,200 before stabilizing at elevated levels in the coming years. This adjustment represents an increase from their previous peak prediction, with UBS highlighting several factors that contribute to a more optimistic outlook.
Read: Oil prices set for 3 percent weekly gain on Russia supply concerns, strong U.S. demand
Other precious metals
As gold prices declined, the precious metals market witnessed negative movement on Friday. Spot silver fell 0.40 percent to $32.79, platinum dipped 0.78 percent to $970.73 and palladium declined 0.57 percent to $971.80.
