Gold hits new peak on Trump tariff worries, US inflation data in focus
Fri Jan 31 2025
Gold prices hit a fresh high on Friday and were set for a fifth straight weekly gain, as market participants worried about U.S. tariff threats while awaiting a key inflation report to assess the Federal Reserve's policy path.
FUNDAMENTALS
* Spot gold was up 0.1% at $2,795.92 per ounce, as of 0035 GMT, rising about 1% so far in the week. Earlier in the session, prices hit an all-time high of $2,799.71.
* President Donald Trump said on Thursday that the United States would put a 25% tariff on imports from Mexico and Canada, repeating his warning to the two countries.
* Trump's tariff plans are widely perceived as inflationary and have potential to trigger trade wars, driving up safe-haven demand for bullion as it is traditionally seen as a hedge against price pressures and geopolitical uncertainty.
* Amid concerns about Trump's tariff plans, 12.9 million troy ounces of gold have been delivered to COMEX-approved warehouses since late November, raising stocks there by 73.5% to 30.4 million ounces, the highest since July 2022.
* Investors now await the December U.S. personal consumption expenditures (PCE) price index report due later in the day.
* Data showed on Thursday that U.S. economic growth slowed in the fourth quarter, but remained robust enough for investors to expect the Fed to lower rates only gradually this year.
* The Fed kept interest rates steady on Wednesday and Chair Jerome Powell said inflation and jobs data would determine when another easing would come.
* Elsewhere, the European Central Bank cut borrowing costs by 25 basis points, as widely expected, and left the door open to further cuts.
* Spot silver gained 0.4% to $31.54 per ounce, platinum added 0.1% to $967.80, and palladium shed 0.2% to $987.10.
* Silver and platinum were poised for weekly gains, while palladium was set for a loss.