Gold prices rise as weak dollar, global uncertainties boost demand
What's the story
Gold prices witnessed a jump on Friday, driven by a weaker US dollar and persistent geopolitical and economic uncertainties. The rise in demand for the safe-haven metal was evident as spot gold rose 0.5% to $3,353.80 per ounce at 9:47am EDT (7:17pm IST). US gold futures also saw an increase of 0.5%, settling at $3,360.50 per ounce.
Market dynamics
'Do not see much of a bearish case in gold'
Marex analyst Edward Meir noted the gains in precious metals were largely due to a weaker dollar. He said, "We do not see much of a bearish case in gold over the medium-term given all that is going on, including out-of-control US spending, lingering trade tensions, inflation uncertainty, and the constant Fed bashing thrown in lately for good measure."
Currency influence
Dollar falls 0.5% on the day
The dollar fell 0.5% on the day, making gold cheaper for buyers holding other currencies. Earlier this week, President Donald Trump had said he was not planning to fire Federal Reserve Chair Jerome Powell, but kept the door open to the possibility while criticizing him for not cutting interest rates. Market participants expect two US rate cuts by year-end, totaling 50 basis points.
Investment trends
Gold thrives during economic uncertainty
Gold has always thrived during times of economic uncertainty, and lower interest rates further boost investor demand for this non-yielding asset. On the tariff front, Indonesia is still negotiating the details of its recently reached trade deal with the US. Meanwhile, US Treasury Secretary Janet Yellen told the Japanese Prime Minister that their countries can get a "good agreement."
Metal market
What about other precious metals?
Spot platinum fell 0.7% to $1,448.03 per ounce after hitting its highest since August 2014 earlier today. Palladium climbed 0.7% to $1,289.50, its highest since June 2023, while silver added 0.5% to $38.31 per ounce. Adrian Ash, head of research at online marketplace BullionVault, said in precious metals, "the carnival has moved on from safe-haven gold to silver, platinum and palladium as pro-growth industrial alternatives."