Last Friday, gold prices fell by more than 1% as some investors opted to take profits. However, the overall market remains supported by changes in global trade policies, inflation expectations, and demand for safe-haven assets, leading gold to achieve weekly gains for seven consecutive weeks.
Gold Prices Decline, But Weekly Uptrend Remains
Spot gold fell 1.6% to $2,882.99 per ounce. Despite falling during the day, it still recorded a 0.8% weekly increase. U.S. gold futures dropped 1.5%, settling at $2,900.70 per ounce.
Despite a short-term decline in gold prices, market participants believe that the overall outlook for gold remains bullish due to factors such as global trade policy uncertainties, potential inflationary pressures, and a weaker dollar. Additionally, more investors shifting from paper gold to physical gold is further driving gold prices upwards steadily.
Trade Policies and Market Impact
Last Thursday, U.S. President Trump instructed his economic team to consider reciprocal tariffs on countries imposing tariffs on U.S. exports. Analysts think this could exacerbate global trade tensions and increase inflationary pressures, further boosting the demand for gold as a safe haven. Gold has long been regarded as a primary tool to hedge against inflation and geopolitical uncertainties, so if trade policies cause economic turmoil, demand for gold may rise further.
U.S. Economic Data Affect Market Sentiment
Recent data shows U.S. retail sales in January experienced the largest drop in nearly two years, indicating that U.S. economic growth could slow at the beginning of the first quarter. This data has strengthened market bets on future Fed rate cuts, thereby enhancing the appeal of gold as a safe-haven asset. The market widely expects that if the Fed cuts rates this year, gold could benefit further.
Performance of Other Precious Metals
Besides gold, other precious metal markets are also affected by market sentiment. Spot silver fell 0.3% to $32.27 per ounce, hitting its highest point since October 31, 2024, earlier in the session. Platinum decreased by 1% to $985.04, and palladium by 1.1% to $982.9. However, all three metals posted gains over the past week.
Outlook: Safe-Haven Demand Continues to Support Gold
Although gold prices are under short-term pressure, overall market sentiment remains bullish. Especially against the backdrop of ongoing trade policies and global economic uncertainties, gold’s safe-haven attributes still attract investors. Analysts believe that in the coming weeks, gold's movement will primarily be influenced by global trade developments, Fed policies, and inflation expectations, with the market closely monitoring data and policy changes to gauge further trends in gold prices.
