Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to in the future.
Here’s what you need to know:
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Gold surged above $4,200/oz this week despite Friday’s sharp sell-off, marking its first-ever close at that level.
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Market anxiety deepened over the ongoing U.S. government shutdown and renewed trade tensions with China.
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The U.S. Dollar weakened on tariff fears but rebounded late Friday as the President rolled back 100% tariffs on Chinese goods.
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Investors are now looking ahead to the next FOMC meeting, with expectations building for a possible rate cut.
Gold prices look set to turn in another week-over-week gain in spot trading, aiming to close this time in the neighborhood of $4,200/oz and a +5% rise since Monday. This, despite what has played out to be an ugly Friday session that so far has marked the yellow metal’s pricing down more than -2% intraday. Gold’s trading pattern this week outlines a system in which pressure continued to build throughout the week, and now in the final session before the weekend, we’re seeing some pressure being released—for now, in a mostly orderly fashion.
As is typically the case when providing support and upward momentum to gold prices, this pressure amounts to the increasing stress, fretting, and uncertainty about the stability (or perceived weakening thereof) of the U.S. economy and the global economy as an extension. On top of the shutdown of the U.S. federal government, stretching now to nearly three weeks, markets have been unsettled this week by last Friday’s ad hoc announcement from the U.S. President of an additional 100% tariff on several categories of Chinese goods and the re-acceleration of the trade war between the globe’s two largest economies that has come as a result.
In response, we’ve seen the U.S. Dollar Index weaken significantly over the course of the week, even breaking below 98.5 before the broader reversals we’re seeing on Friday. Outside of direct interest from investors and money managers in building longer gold positions, the softening Dollar certainly added a tailwind to the precious metal’s pricing, contributing to gold’s first-ever close above $4,200/oz.
Friday’s steep sell-off in gold coincides with the U.S. President walking back the 100% tariffs on China decreed last week, calling them “unsustainable” in reality. The value of this relief (temporary as it may be) to investors is evident in the $100+ sell-off in gold spot markets and the rebounding U.S. Dollar.
