Investing.com-- Gold prices fell in Asian trade on Friday, pressured by a resilient dollar amid some signs of strength in the U.S. economy, even as legal sparring over President Donald Trump’s trade tariffs rattled risk appetite.
The yellow metal was headed for a weekly decline, having taken only limited support from heightened uncertainty over Trump’s trade tariffs. Bullion prices did gain some ground on Thursday after an appeals court ruled to temporarily reinstate Trump’s tariff agenda, but this was insufficient in offsetting losses clocked earlier this week.
Strength in the dollar, following some upbeat U.S. economic data, was a major point of pressure on gold and broader metal prices, while markets were also bracing for a potentially strong PCE price index inflation reading later on Friday.
Spot gold fell 0.7% to $3,293.44 an ounce, while gold futures for August fell 0.8% to $3,316.67 an ounce by 00:44 ET (04:44 GMT).
Gold heads for weekly loss despite Trump tariff whipsaw
Gold was trading down over 1% this week, as losses earlier this week largely offset some gains made on Trump’s tariff whipsaws.
Gold was pressured by a mix of dollar strength and sustained profit-taking, especially after spot prices raced to a record high earlier in May.
Gold had lost ground earlier this week after Trump announced a delay in his plans to impose steep trade tariffs on the European Union. It had fallen further after a trade court on Wednesday ruled to block Trump’s tariffs, although they were shortly after reinstated by an appeals court.
Trump lashed out against the judges who ruled against his tariffs, and expressed hope that the Supreme Court will back his plans.
Gold saw limited gains on the tariff reinstatement, with the continued tariff swings also sparking some bets that Trump will not make good on his tariff threats.
A term mocking Trump’s tariff indecision was seen gaining traction on social media. TACO- an acronym for “Trump Always Chickens Out”-- was widely circulated on social media, amid growing views that despite his harsh rhetoric, Trump will always back down from his more extreme tariff measures.
Dollar strength pressures metal prices; PCE data on tap
While the dollar did fall after Trump’s latest tariff turnaround, it was headed for mild weekly gains amid signs of stability in the Treasury market, while some upbeat U.S. economic data also helped.
Gross domestic product data showed the U.S. economy shrank slightly less than initially estimated in the first quarter.
Comments from the Federal Reserve- than interest rates were unlikely to fall in the near-term, also aided the dollar.
Resilience in the dollar pressured broader metal prices. Platinum futures fell 0.6% to $1,074.85/oz, while silver futures fell 1% to $33.075/oz.
Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,564.40 a ton, while U.S. copper futures fell 0.4% to $4.6535 a pound.
Focus was now on PCE price index data- the Fed’s preferred inflation gauge- for more cues on the U.S. economy. The data is expected to show inflation remained sticky in April, while core PCE remained above the Fed’s 2% annual target– a trend that gives the central bank less impetus to cut rates.
