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The price of gold fell on Friday, strengthening after a 2% hike in the previous session, after US President Donald Trump broke a trade truce with China, but the metal was on the brink. to make a third weekly gain out of four.
The spot gold price was down 0.9% to $ 1,432.15 an ounce at 0139 GMT, after peaking at $ 1,446.10 two weeks earlier in the session.
The metal has increased from about 1% so far this week.
US gold futures advanced 1% to $ 1,445.90 an ounce.
Trump announced that it would impose additional duties of 10% on Chinese imports worth $ 300 billion on September 1, after US negotiators returned from trade negotiations in Shanghai, claiming that China had not bought large quantities of US agricultural products as promised.
Trump also said that if trade negotiations fail, he could raise tariffs even beyond the 25% tax he's already imposed on imports of $ 250 billion from China.
The tariffs could also force the Federal Reserve to reduce interest rates again to protect the US economy from trade policy risks, experts said.
October federal funds rate futures surged to fully integrate a rate cut in September, up from about 60% before the price announcement. Another move of 25 basis points is expected in December.
Trump's surprise announcement shocked the world's financial markets and canceled the recent yen's rise against the yen after US Federal Reserve Chairman Jerome Powell said the central bank would not begin a prolonged relaxation cycle.
The dollar index remained steady on Friday after posting its biggest daily drop in two weeks during the previous session.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.53% to 827.82 tonnes on Thursday, from 823.42 tonnes on Wednesday.
Global gold demand increased by 8% in the first half of this year, reaching its highest level since 2016, driven by central bank purchases and a flood of investments in gold-backed exchange-traded funds (ETF), announced Thursday the World Gold Council.
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