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Gold Set for Worst Week in 3 Years as US Dollar Rallies

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
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Gold Set for Worst Week in 3 Years as US Dollar Rallies

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk

Gold prices steadied near the previous session's two-month lows on Friday and were poised for their worst weekly performance in over three years as a rallying US dollar and expectations of less aggressive interest rate cuts by the Federal Reserve pressured the precious metal.

Spot gold was little changed at $2,568.37 per ounce as of 1215 GMT. Prices have fallen more than 4% so far this week, touching their lowest since Sept. 12 on Thursday. US gold futures were also flat at $2,573.00.

"So far gold has been negatively impacted by the election of Trump but this can change if there is some more uncertainty which could come back in the medium term," said Kinesis Money market analyst Carlo Alberto De Casa, adding that Trump's policies were leading investors to expect higher US inflation and interest rates, Reuters reported.

"Overall markets are betting on a stronger US dollar and that is bearish market driver for gold."

The dollar was set for its best week in more than a month.

Economists believe President-elect Donald Trump's tariff plans would stoke inflation, potentially slowing the Fed's rate easing cycle. Higher interest rates make holding gold less attractive as investors can earn higher returns on other assets.

The US central bank does not need to rush to lower interest rates, Fed Chair Jerome Powell said on Thursday in remarks that may point to borrowing costs remaining higher for longer for households and businesses alike.

Markets now see a 62% chance of a 25 basis point rate cut in December, down from 83% a day before, according to the CME Fedwatch tool.

US retail sales data is due at 1330 GMT, while several Federal Reserve officials are scheduled to speak later.

Spot silver rose 0.6% to $30.64 per ounce, platinum was up 0.8% at $947.50 and palladium added 2.4% to $963.84. All three metals were on track for weekly declines.

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Oil Rises on Rebound in China's Imports, But Trade War Concerns Persist

Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
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Oil Rises on Rebound in China's Imports, But Trade War Concerns Persist

Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)

Oil prices edged up on Monday after Chinese data showed a sharp rebound in crude imports in March, although concerns that the escalating trade war between the United States and China would weaken global economic growth and dent fuel demand weighed.
Brent crude futures gained 6 cents, or 0.09%, to $64.82 a barrel at 0632 GMT. US West Texas Intermediate crude futures were trading at $61.59 a barrel, up 9 cents, or 0.15%.
China's crude oil imports in March rebounded sharply from the previous two months and were up nearly 5% from a year earlier, data showed on Monday, boosted by a surge in Iranian oil and a rebound in Russian oil deliveries.
However, Brent and WTI have lost about $10 a barrel since the start of the month, and analysts have been revising down their oil price forecasts as the trade war between the world's two largest economies has intensified.
Goldman Sachs expects Brent to average $63 and WTI to average $59 for the remainder of 2025 and sees Brent averaging $58 and WTI $55 in 2026.
It sees global oil demand in the fourth quarter of 2025 rising by just 300,000 barrels per day year-on-year, "given the weak growth outlook," analysts led by Daan Struyven said in a note, adding that the demand slowdown is expected to be the sharpest for petrochemical feedstocks.
BMI, a unit of Fitch Solutions, cut its Brent price forecast to $68 from $76 a barrel for 2025 as it expects slowing economic activity to erode demand.
The Brent price spread between December 2025 and December 2026 has also flipped into contango as investors priced in oversupply and demand concerns, BMI said. In a contango market, front-month prices are lower than those in future months, indicating no shortage of supply.
Beijing increased its tariffs on US imports to 125% on Friday, hitting back against President Donald Trump's decision to raise duties on Chinese goods and raising the stakes in a trade war that threatens to upend global supply chains.
Trump on Saturday granted exclusions from steep tariffs on smartphones, computers and some other electronics largely imported from China, but on Sunday he said he would be announcing the tariff rate on imported semiconductors over the next week.
The trade war has heightened worries that unsold exports could continue driving domestic Chinese prices down.
"Inflation data from China were a window into an economy that is not in shape for a trade fight. Consumer prices fell for a second month in a row in year-on-year terms, while producer prices chalked up their 30% straight fall," Moody's Analytics said in a weekly note, referring to data released on April 10.
As companies prepare for a possible decline in demand, US energy firms last week cut oil rigs by the most in a week since June 2023, lowering the total oil and natural gas rig count for a third consecutive week, according to Baker Hughes.
Potentially supporting oil prices, US Energy Secretary Chris Wright said on Friday that the United States could stop Iran's oil exports as part of Trump's plan to pressure Tehran over its nuclear program.
Both countries held "positive" and "constructive" talks in Oman on Saturday and agreed to reconvene next week in a dialogue meant to address Tehran's escalating nuclear program, officials said over the weekend.
"This may help remove some of the sanction risk affecting the oil market, particularly if talks keep on moving in the right direction," ING analysts led by Warren Paterson said in a note.