Gold resumed its upward trajectory on Friday, supported by escalating US-China trade tensions and a mixed US employment report. The precious metal, trading at $2,862 per ounce, rose by 0.24% amid these developments.
US President Donald Trump’s plans to impose reciprocal tariffs on several countries next week boosted gold’s appeal as a safe-haven asset. The potential for heightened tensions over the weekend likely spurred increased interest in gold, which tends to benefit during periods of uncertainty or geopolitical risk.
US labor market data showed that January’s Nonfarm Payrolls (NFP) missed expectations, but the Unemployment Rate fell, signaling that the labor market remains strong. Despite the NFP miss, the unemployment rate dip suggests the economy could be resilient, which may influence the Federal Reserve’s decision to avoid aggressive easing of monetary policy. As a result, gold prices briefly surged to $2,886 per ounce but retraced to their earlier levels after the market digested the data.
Additionally, reports indicated that the People’s Bank of China (PBoC) has resumed its gold purchases, increasing reserves from 73.29 million ounces to 73.65 million ounces, further supporting gold’s bullish trend.
As for the Federal Reserve, various officials offered their takes on the economy and interest rates. Minneapolis Fed President Neel Kashkari hinted at a “modestly lower” policy rate, while Chicago Fed President Austan Goolsbee acknowledged that the NFP data was solid but noted that the pace of rate cuts would be slower and more uncertain. Fed Governor Adriana Kugler emphasized that inflation had plateaued, suggesting that it would make sense to keep the policy rate where it is for now.
These mixed signals from the Fed, coupled with geopolitical risks, continue to buoy gold prices, highlighting its role as a safe-haven asset amid uncertainty.
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