Gold prices saw a slight drop to $3,741.71 per ounce, as strong U.S. economic data tempered expectations for Federal Reserve rate cuts, which in turn bolstered the dollar. Market participants are paying close attention to U.S. inflation data to determine the next directional shift in the markets.
The recent implementation of tariffs by President Trump is shaping the changing economic environment, with other precious metals showing different trends. Gold saw a minor drop on Friday as strong U.S. economic data cast doubt on the Federal Reserve’s potential for rate cuts and bolstered the dollar. At the same time, investors were ready for the U.S. inflation data expected to be released later in the day, looking for further direction.
Spot gold fell by 0.2% to $3,741.71 per ounce as of 0033. The price of bullion has risen by 1.7% so far this week. Gold futures in the U.S. for December delivery held steady at $3,772.20. The U.S. dollar index stayed near a three-week high, leading to increased costs for bullion priced in dollars for international buyers. The decrease in the number of Americans applying for unemployment benefits last week aligns with a quicker-than-expected expansion of the U.S. economy in the second quarter, fueled by strong consumer spending and business investment. On Thursday, U.S. President Donald Trump declared a complete tariff on imported branded drugs, a quarter tariff on heavy-duty trucks, a half tariff on kitchen cabinets, and a thirty percent tariff on upholstered furniture, set to take effect on October 1. The information regarding the personal consumption expenditures price index, which is the preferred measure of inflation by the Federal Reserve, will be published at 1230. A poll indicates that a month-on-month increase of 0.3% and a year-on-year rise of 2.7% for August are expected.
Fed policymaker Stephen Miran has shown backing for significant rate reductions intended to safeguard the labor market, while alleviating worries about inflationary pressures related to tariffs. Safe-haven bullion, usually performing well in a low-interest-rate environment, hit a record high of $3,790.82 on Tuesday. SPDR Gold Trust, the leading gold-backed exchange-traded fund worldwide, announced a reduction in its holdings by 0.37%, falling to 996.85 tonnes on Wednesday from 1,000.57 tonnes on Tuesday. Spot silver experienced a decline of 0.7%, settling at $44.92 per ounce. In contrast, platinum saw an increase of 0.6%, reaching $1,538.15, while palladium rose by 0.5%, now priced at $1,255.72. All three metals were poised for weekly increases.