Gold Sets All-Time Weekend High Despite Trade-Tariff Talks and 'No Change' Fed
Friday, 5/09/2025 14:30
GOLD PRICES held onto an overnight rally in London trade on Friday to head for a record-high weekly close in Dollars, Euros and Sterling despite the Federal Reserve failing to cut US interest rates this week while President Trump said more trade deals to roll back his 'Liberation Day' import tariff hikes are set to follow yesterday's agreement with the UK.
"Many Trade Deals in the hopper, all good (GREAT!) ones!" tweeted Trump on his TruthSocial platform ahead of US and Chinese negotiators meeting in Switzerland.
Gold bullion in London − centre of the precious metal's global trading and storage network − rose to $3330 per Troy ounce ahead of Friday's 3pm benchmarking auction, down $100 from Tuesday's near-record level but 2.5% higher from last weekend.
"It seems to be we're entering a new phase where the administration is beginning talks with a number of our important trading partners," said Fed chair Jerome Powell after leaving overnight rates − against which gold prices have often moved inversely − at 4.33% per annum for the 5th month running
as analysts and markets expected.
"It's not a situation where we can be preemptive,
because we actually don't know what the right responses...will be until we see more data."
Four-fifths of betting on June's US central bank decision now says the Fed will again make 'no change' next month, according to data from the CME derivatives exchange.
That's leapt from zero as recently as 8th April, the day that US stock markets hit 6-month lows − and when the Dollar gold price last dipped below $3200 per ounce − in
the aftermath of Trump's trade-tariff shock.
"Trade headlines/rhetoric is driving gold price action," says strategist Nicky Shiels at Swiss bullion refining and finance group
MKS Pamp, adding that "I can't remember the last time the market spent this little time thinking about" a Federal Reserve decision day as Wednesday this week.
"CTAs are all plugged into the trade-on/trade-off headlines," Shiels goes on, pointing to Commodity Trading Advisors and traders in gold futures and options contracts and noting how prices made an "$80 plummet on Tuesday night on China-US trade talk [even as] India struck back [at Pakistan], escalating tensions in the Kashmir region"
between the 2 nuclear powers.
"Geopolitics, economic data and [the] Fed matters less [but] with these binary outcomes" − such as trade tensions worsening or easing − the market's responses "become increasingly smaller...ie, gold will not fall $100 on the next trade deal headline!"
"We expect US policy and structural risks to continue driving gold investment,"
agrees a note from the mining industry's World Gold Council.
"Profit taking could bring pause, but may also encourage consumers."
Gold prices in China − the No.1 mining, importing, consumer and central-bank buying nation − had earlier closed lower for the 2nd session running after testing last month's record of 830 per gram.
"China loosens gold import quotas with eye on arresting Yuan rally,"
said a story on Reuters yesterday, expanding reports from Bloomberg that the People's Bank is increasing quotas for bullion inflows in a bid to boost domestic demand for Dollars to pay for new shipments.
That could dampen the Chinese currency's recent steep rise on the FX market, which threatens to worsen falling export sales already hit by Trump's trade tariffs, in a move opposite to how Beijing has previously
sought to stem a fall in the Yuan by restricting gold imports.
With Chinese households
borrowing cash to buy gold bullion and related products this spring, China's private-sector demand for gold has already "erupted" in the country's gold-backed ETF trust fund products, the World Gold Council says, helping take the global sector's assets under management to a record $345 billion at end-April with the bullion needed to back those shares reaching its highest since May 2023.
Silver prices also rallied today to regain half the week's previous jump, trading 20 cents higher from last Friday's London benchmarking at $32.60 per Troy ounce.
With silver now 11.9% higher for 2025 to date and the Dollar gold price rising 26.3%, the S&P500 index of major US corporate stocks was set to start Friday's New York trade 3.7% lower from New Year's Eve.
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