Gold Slips as Trade Optimism and AI Boom Weaken Safe-Haven Appeal
Gold prices declined in Asian trading on Friday, retreating further from recent five-week highs and erasing most of the week’s earlier gains. The drop came as optimism surrounding U.S. trade agreements and the surge in artificial intelligence investments dampened investor demand for safe-haven assets.
Other metals remained largely rangebound after giving back much of their earlier weekly gains. However, losses across the board were somewhat cushioned by a softer U.S. dollar.
As of 01:34 ET (05:34 GMT), spot gold was down 0.3% at $3,358.82 per ounce, while gold futures dropped 0.4% to $3,360.80 per ounce.
Gold and Platinum Drift Lower, Silver Outperforms
For the week, gold prices were still up a modest 0.3%. Platinum, on the other hand, dropped 0.9% on Friday to $1,404.06 per ounce, bringing its weekly loss to 1.4%. Silver outpaced both, heading for a 2% weekly gain. Spot silver held steady at $39.0115 per ounce, showing more resilience than gold in recent sessions.
The broader retreat in precious metals was driven by stronger risk appetite, fueled by a U.S.-Japan trade agreement and upbeat earnings from companies tied to artificial intelligence, which spurred a rally in global equities. Wall Street logged a series of record highs this week, bolstered by growing expectations that President Donald Trump may finalize more trade deals with key global economies.
Despite this shift toward riskier assets, precious metals maintained some support due to anticipation of major economic events in the coming week, which kept safe-haven interest partially intact.
Copper Mixed Ahead of Tariff Impact
In industrial metals, benchmark copper futures on the London Metal Exchange edged down 0.3% to $9,844.45 per metric ton. COMEX copper futures dipped 0.2% to $5.8153 per pound.
London copper prices remained flat for the week, while their U.S. counterparts were on track for a 3.8% weekly gain. Traders cited concerns over tighter domestic copper supplies as Trump’s 50% tariff on the metal is expected to kick in soon, potentially leading to U.S. market shortages.
All Eyes on Fed Meeting and Tariff Deadline
Gold retained some safe-haven demand as markets looked ahead to several key developments next week. The Federal Reserve is expected to hold interest rates steady, despite repeated pressure from President Trump to implement cuts.
Fed Chair Jerome Powell has indicated that lingering uncertainty over the inflationary effects of Trump’s tariffs has made the Fed cautious about adjusting rates. This stance has created tension with Trump, who has frequently criticized Powell and even floated the idea of his removal.
On Thursday, Trump visited the Federal Reserve headquarters to observe renovations—an unusual move that some speculate may have broader implications for Powell’s tenure.
Markets are also bracing for Trump’s looming August 1 deadline to implement sweeping new tariffs. Ongoing negotiations between the U.S. and the European Union may result in a lower 15% tariff on EU imports, though nothing is finalized.
In addition, Trump’s proposed 50% tariff on copper is set to take effect next week, likely exacerbating domestic supply constraints and pushing U.S. copper prices higher.
