Gold prices dipped in Asian trading on Friday, showing little recovery despite a pullback in the dollar following the Federal Reserve’s interest rate cut. Markets were also processing the implications of a potential second Donald Trump presidency.
The yellow metal had been pressured earlier in the week by a sharp surge in the dollar after Trump’s victory in the 2024 election. However, the dollar eased off four-month highs on Thursday after the Fed announced a rate cut and hinted at further easing measures.
Spot gold slipped 0.4% to $2,695.93 per ounce, while December gold futures dropped 0.1% to $2,702.80 an ounce by 23:38 ET (04:38 GMT).
Gold is on track for a weekly loss following a sharp post-Trump selloff. Spot gold was poised to decline by around 1.6% this week, after plummeting in the wake of Trump’s election victory.
The drop was partly driven by a surge in the dollar and rising Treasury yields, as investors anticipated that Trump’s policies could be more inflationary in the long run.
However, Trump’s win also ended the uncertainty surrounding the U.S. elections, leading to a rally in risk assets. Gold had surged to record highs ahead of the election, with spot prices nearing $2,800 an ounce.
Gold received a boost on Thursday following the Federal Reserve’s anticipated 25 basis point rate cut.
Fed Chair Jerome Powell noted that the U.S. economy remains resilient and signaled that the central bank plans to continue easing monetary policy, though at a measured pace.
This scenario provides some short-term relief for gold and other non-yielding assets. However, market sentiment has turned cautious about the longer-term outlook for rates, particularly with the uncertainty surrounding a potential Trump presidency.
Other precious metals also struggled on Friday, nursing weekly losses. Platinum futures dropped 0.6% to $997.85 per ounce, while silver futures edged down 0.1% to $31.823 per ounce.
Copper prices eased on Friday but were still set to post gains for the week, as traders looked for further signals on fiscal stimulus from China, the world’s top importer of the metal.
Benchmark copper futures on the London Metal Exchange dropped 0.7% to $9,614 per ton, while December copper futures fell 0.9% to $4.3970 per pound.
At the conclusion of a four-day meeting on Friday, China’s National People’s Congress is expected to announce plans for increased fiscal spending. The measures are anticipated to focus primarily on supporting economic growth as the country continues to face persistent deflation and a slowdown in the property market.
