Gold prices fell on Friday as risk appetite among investors cooled down following the announcement of U.S. President Donald Trump’s tariff measures. The announcement, which included over 180 countries, has provided more clarity for markets but raised pressing concerns over a global economic slowdown.
In the UAE, gold rates declined, with 24-carat gold falling AED3.75 to AED372.5 and 22-carat losing AED3.25 to AED345. In addition, 21-carat gold declined AED3.25 to AED330.75, and 18-carat gold edged down AED2.75 to AED283.5.
Globally, spot gold fell 0.16 percent to $3,098.04 as of 4:08 GMT, after hitting an all-time high of $3,167.57 in the previous session. Despite today’s decline, prices were on track for a fifth consecutive weekly gain amid rising safe-haven demand, which has aided gold in reaching three record highs this week.
Meanwhile, U.S. gold futures lost 0.09 percent to $3,118.94.
Trump’s tariffs weigh on bullion traders
In the previous session, gold prices declined by more than 2 percent as a wider market sell-off sparked by Trump’s new global tariffs weighed on bullion traders. The sharp fall came only hours after gold reached a record high of $3,167.57. Analysts noted that gold prices tend to rally amid uncertainty but tend to lose that support once markets learn how to price the risks involved.
On Wednesday, Trump announced that he would impose a 10 percent baseline tariff on all imports to the U.S. and higher duties on some of the country’s biggest trading partners. In response, some U.S. trading partners threatened to implement retaliatory measures, raising fears of a global trade war and rising prices.
The Trump administration also confirmed that the 25 percent global car and truck tariffs will take effect on April 3 as planned, and duties on automotive parts imports will be launched on May 3.
“The U.S. tariff policy has been favorable for gold, helping it set more than 15 records this year and achieve a nearly 19 percent increase year-to-date. This rally, resembling a strong performance seen in 1986, has been driven by consistent central bank buying, expectations of lower interest rates and geopolitical tensions,” said Vijay Valecha, chief investment officer, Century Financial.
Fed rate cut expectations rise
The market’s focus is now on how the Federal Reserve will react to the latest tariffs, which are expected to significantly shift the country’s economic outlook. Traders will now await the release of the U.S. non-farm payrolls report, which could provide insights into the Fed’s interest rate trajectory.
Investors have raised expectations that the Federal Reserve will resume its rate-cutting cycle in June and lower borrowing costs four times by the end of the year as Trump’s trade policies reignite U.S. recession fears.
Meanwhile, data released on Thursday showed that economic activity in the U.S. services sector eased in March, with the ISM Services PMI falling to 50.8 from 53.5 in February and missing estimates. In addition, the U.S. Department of Labor reported that U.S. citizens filing new applications for unemployment insurance ticked lower to 219,000 for the week ending March 29 from the 225,000 previously.
Read: Stocks dip as global trade war fears mount, dollar falls to six-month low
Other precious metals
As gold prices fell from their most recent high, the precious metals market saw mixed movement. Spot silver fell 1.43 percent to $31.41 an ounce while platinum lost 0.53 percent to $947.24. However, palladium gained 0.14 percent to $929.50.
