Gold fell as much as 0.8% on Friday as investors awaited the release of the U.S. personal consumption expenditures price index – the Federal Reserve’s most favored inflation indicator – later in the day. Markets will assess the report, which will provide insights into actual consumer spending and wage growth in April, to understand how President Donald Trump’s global trade war is affecting the economy.
Technical factors ahead of the data release also drove the sell-off, said Kelvin Wong, senior analyst at Oanda Asia Pacific Pte.
“Gold price action failed to break through key near-term resistance at $3,328 twice – once during yesterday’s U.S. trading session and again early in today’s Asian trading session,” he said.
Nevertheless, despite the weekly decline in gold prices, the safe-haven appeal of gold remained intact as the market was hit again by uncertainty over Trump’s tariff agenda after a federal appeals court on Thursday temporarily reversed its ruling against Trump’s threat to roll back most of his planned tariffs.
Tensions between the United States and China resurfaced this week, with U.S. Treasury Secretary Scott Bessant calling trade talks with Beijing “a bit of a standstill.” Earlier this week, the White House announced it would begin revoking Chinese student visas while imposing new restrictions on the sale of chip design software – a move that drew strong rebukes from Beijing.
All of this could bolster gold’s safe-haven appeal, with Goldman Sachs Group Inc. saying this week that it will continue to be a hedge against inflation in long-term portfolios, along with crude oil.
Spot gold fell 0.5% to $3,300 an ounce as of 1:40 p.m. in Singapore. The Bloomberg Dollar Spot Index edged up after a volatile session in the previous session. Silver (SI=F), palladium (PA=F) and platinum (PL=F) all fell.
