Gold prices held steady on Friday, remaining close to record highs despite U.S. President Donald Trump delaying his plans for reciprocal tariffs. While the delay sparked a risk-on move in financial markets, the precious metal benefited from a weaker U.S. dollar and concerns about inflation, which fueled optimism for potential interest rate cuts.
Gold Prices Hold Near Record Levels
Spot gold remained at $2,928.91 an ounce, while gold futures expiring in April rose by 0.4% to $2,957.19 an ounce by 00:22 ET (05:22 GMT). Earlier in the week, gold touched a record high of $2,943.25 per ounce.
The yellow metal has been buoyed by persistent demand for safe-haven assets amid ongoing uncertainties surrounding global trade and U.S. economic policies. For the week, gold was on track to add about 2.4%, marking its seventh consecutive week of gains. The demand for gold remains strong as investors seek stability in the face of rising geopolitical risks.
Tariff Delays and Weak Dollar Support Gold
Trump’s delay of the reciprocal tariffs until April gave countries more time to negotiate with Washington, improving market sentiment. However, the dollar was impacted by the announcement, losing much of its recent strength. The weaker dollar bolstered gold’s appeal as an alternative investment.
In addition to tariff delays, mixed inflation data helped drive optimism about lower interest rates in the U.S., which in turn supported gold’s upward momentum. The Producer Price Index (PPI) and Consumer Price Index (CPI) both exceeded expectations for January, although certain components of the data softened slightly, leading to expectations that the Federal Reserve might ease interest rates in the future.
Continued Safe-Haven Demand Amid Political Uncertainty
Despite some improvement in risk sentiment, uncertainty surrounding President Trump’s policies continues to fuel safe-haven demand for gold. Trump has maintained aggressive trade rhetoric, including the imposition of 25% tariffs on steel and aluminum imports earlier this week. Although the delay on further tariffs provided some market relief, concerns about potential escalation in trade tensions kept investors wary.
Copper and Other Industrial Metals Benefit from Tariff Speculation
The industrial metals market also saw a surge this week, spurred by Trump’s tariffs on U.S. trading partners, which raised fears of supply shortages. While copper was not directly impacted by the tariffs, traders speculated that it might eventually face duties as well.
Additionally, China’s export controls on key materials in retaliation for U.S. tariffs further fueled expectations of a supply squeeze, benefiting industrial metals.
Benchmark copper futures on the London Metal Exchange rose by 0.9% to $9,572.05 per ton, while March copper futures increased by 0.4% to $4.8045 per pound.
Mixed Inflation Data Influences Precious Metals
The weakness in the dollar also extended to other precious metals. Platinum futures rose by 0.2% to $1,050.45 per ounce, and silver rallied nearly 2% to $33.352 per ounce. Mixed inflation data, coupled with the potential for future rate cuts, has contributed to the upward movement in the broader precious metals market.
Conclusion
As global trade tensions and uncertainty about U.S. economic policies persist, gold remains a key beneficiary of safe-haven demand. While optimism about lower interest rates has supported prices, the market continues to monitor developments surrounding tariffs, inflation, and geopolitical risks. With gold maintaining its record-high levels and industrial metals gaining traction, precious metals seem poised to continue benefiting from the ongoing volatility.
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