Spot gold was down 0.9% at $1,432.28 per ounce as of 0415 GMT, after hitting a two-week high of $1,446.10 earlier in the session.
The metal has risen about 0.9% so far this week and is headed for a third weekly gain in four.
U.S. gold futures rose 0.8% to $1,444.50 an ounce.
· “At this situation, what we are looking at is a correction,” said Ilya Spivak, a senior currency strategist with DailyFx.
· The metal jumped more than 2% on Thursday after Trump said he would impose an additional 10% tariff on $300 billion worth of Chinese imports from next month, intensifying the bruising trade war between the world’s two top economies that has roiled financial markets globally.
Trump also said if trade negotiations fail to progress he could raise tariffs further — even beyond the 25% levy he has already imposed on $250 billion of imports from China.
· “Any escalation in Sino-U.S. trade tensions will likely trap the Federal Reserve on a dovish slope — reigniting market-implied rate cut pricing,” OCBC analysts said in a note.
The October Fed funds rate futures have jumped to now fully price in a rate cut in September, compared with only around 60% before the tariff announcement. Another 25 basis point move is priced in by December.
· The dollar index was up 0.1% on Friday after posting its biggest daily decline in two weeks in the previous session.
· Market participants are now awaiting the release of U.S. non-farm payrolls data due later in the day.
· Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.53% to 827.82 tonnes on Thursday from on Wednesday.
· Spot gold may retest a resistance at $1,449 per ounce, a break above which could lead to a gain into the range of $1,461-$1,474, said Reuters technical analyst Wang Tao.
· Gold technical analysis: Yellow metal surges near multi-month highs as the trade war escalates
Gold spiked near multi-month highs as US President Trump announced a new round of tariffs on China. The news triggered the risk-off mood with gold going up and the US Dollar going in the opposite direction.
The yellow metal bulls will need to break above 1,452.71, the 2019 high, in order to travel north towards 1,476.00 resistance. Gold is trading above its main simple moving averages suggesting bullish momentum in the medium term.
Bulls should ideally keep the price above 1,440.00 in order to reach new 2019 highs. On the flip side if the 1,440.00 support gets breached, the market could decline towards 1,430.00, 1,420.00 and the 1,414.00 level.
Gold prices bounced sharply higher to threaten the July 19 high at 1452.95. A daily close above that targets the 38.2% Fibonacci expansion at 1470.68. Alternatively, a turn below the $1400/oz figure exposes a dense support bloc running down through 1346.75.
· Elsewhere, palladium climbed 1% to $1,438.53 per ounce after falling to a seven-week low in the previous session, and was on track for its worst week in three months.
Platinum was up 0.5% at $852.31 an ounce, while silver fell 1% to $16.17.
Both silver and platinum were headed for their first weekly decline in four.
Reference: CNBC, Daily FX, FX Street
Thai
Eng