Gold Prices Set for Weekly Rise Despite Attempts to Calm Trade-War Fears

Gold prices were set to notch a weekly gain on Friday amid renewed safe-haven demand despite the Trump administrations attempt to calm trade-war fears after U.S. President Donald Trump threatened to impose additional tariffs on Chinese imports.

Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose by $6.60, or 0.50%, to $1,335.10 a troy ounce.

Administration spokespeople said Friday that while there is possibility of trade war with China, they remained “cautiously optimistic” that the two nations would agree on a compromise.

This comes just hours after Beijing vowed to fight back “resolutely” with fresh measures to protect its interests after President Donald Trump threatened to impose an extra $100 billion in tariffs.

Also helping sentiment was weakness in the greenback after the US economy created fewer than expected jobs in March, raising investor doubts about the prospect of the Federal Reserve adopting a faster pace of rate hikes.

“The probability of a June rate hike remains elevated at 79% but without a meaningful uptick in price pressures, the FOMC will find it difficult to justify a second 2018 rate increase,” Stifel said.

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.

In other precious metal trade, silver futures rose 0.06% to $16.37 a troy ounce, while platinum futures rose 0.23% to $917.40 an ounce.

Copper fell 0.63% to $3.055.

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