The shine of gold may dazzle, but its journey is often shaped by quiet shifts in global events. Traders this week received a reminder that political decisions and currency movements can quickly take the shine off it. Gold gave back some of its recent gains as investors processed new economic data and the return of tariff tensions, underscoring how even an age-old safe harbor isn't immune from the market storm.
By 2:26 p.m. ET on Friday, spot gold was down 0.7% at $3,293.59 per ounce on a weekly basis, quoted as a 1.9% decline. U.S. gold futures finished down 0.9% at $3,315.40. The downward move came after a small increase in the U.S. dollar, which gained 0.1% on the index, pricing gold higher for those holding other currencies.
Also driving market jitters on Thursday, a U.S. federal appeals court reinstated significant tariffs first imposed by former President Donald Trump. That was only a day after the trade court found that Trump had exceeded his authority. That decision by the court has now thrown investors into confusion about what happens next with international trade.
"Gold is consolidating," said David Meger, head of metals trading at High Ridge Futures. "We have slightly less safe-haven demand now, but escalating political tensions, particularly with tariffs, could easily support prices once more," he said.
On the economic front, the U.S. Personal Consumption Expenditures (PCE) Price Index, an important inflation measure, increased by 2.1% in April from a year earlier. The increase was slightly less than the 2.2% expected by economists, indicating a potential slowdown in inflation. The report strengthened expectations in financial markets of a Federal Reserve interest rate cut in September.
Lower interest rates tend to help gold, which offers no yield of its own but does become more attractive to investors when borrowing costs fall. Gold prices reached a record high of $3,500.05 per ounce earlier in April amid expectations of rate cuts and global instability.
Physical demand for gold in India, meanwhile, continued to be soft. Prices in the local market gained, and wedding season also was dissipating, which resulted in a lower number of buyers in the world's second-biggest gold consumer, they said.
Other precious metals fell as well. Spot silver fell 1.2% to $32.94 an ounce, while platinum fell 2.5% to $1,055.05, and palladium was down 0.6% at $967.30.
