Gold prices advanced during Asian trading on Friday, recovering from the previous day’s sharp losses and staying on course for a weekly gain, driven by concerns over the U.S. fiscal deficit and uncertainty surrounding an upcoming tariff decision from Washington.
Spot gold rose 0.5% to $3,341.34 per ounce, while August gold futures were up 0.2% to $3,349.52 by 00:10 ET (04:10 GMT).
Thursday saw bullion slide nearly 1% after a strong U.S. jobs report diminished the likelihood of an interest rate cut from the Federal Reserve in July. Despite the dip, gold remained on track for a 1.8% gain this week, which would mark its first weekly advance in three weeks.
Tariff Announcement Looms as Trade Tensions Grow
President Trump said Thursday that the U.S. will begin sending official notices to major trading partners as early as Friday, outlining new flat tariff rates ranging between 20% and 30%.
Trump added that the U.S. would abandon drawn-out trade talks with over 170 countries in favor of this unilateral approach. So far, formal agreements have only been reached with the UK, Vietnam, and a limited framework with China.
The heightened risk of global trade tensions and lack of clarity on tariff implementation provided some safe-haven support for gold.
Fiscal Concerns and Mixed Signals for Gold
This week, gold was also buoyed by growing worries over the U.S. budget deficit, especially after Congress passed Trump’s sweeping tax and spending bill on Thursday. The legislation, which includes tax cuts, increased border security funding, and reduced welfare spending, now heads to Trump’s desk ahead of his self-imposed July 4 deadline.
The Congressional Budget Office estimates the bill will add $3.4 trillion to the already $36.2 trillion national debt.
However, Thursday’s positive jobs report—which showed U.S. payrolls grew more than expected in June—pressured gold, as it reduced expectations for an imminent rate cut by the Fed.
Stronger jobs data suggests a resilient U.S. economy, which in turn makes a rate cut less likely. Since higher interest rates tend to boost returns on interest-bearing assets, they diminish the appeal of non-yielding assets like gold.
Broader Metals Market Mixed as Dollar Holds
The U.S. Dollar Index dipped 0.1% in Asian trading, but remained elevated after Thursday’s strong labor market data.
- Platinum futures rose 0.5% to $1,385.80 per ounce
- Silver futures slipped 0.3% to $37.00 per ounce
- London copper futures edged down 0.3% to $9,923.65 per ton
- U.S. copper futures fell 0.4% to $5.115 per pound
