Gold prices lifted to fresh record highs in Asian trade on Friday, as investors weighed dovish signals from the Federal Reserve, persistent United States-China trade tensions, and the prospect of renewed diplomacy over the Russia-Ukraine conflict.
By 4:10 pm AEDT (5:10 am GMT), spot gold was up 1% at US$4,370.16 per ounce.
For the week, gold is on track to post an 8% gain - its ninth consecutive weekly advance - driven by renewed weakness in the U.S. dollar, heightened geopolitical tensions, and growing expectations of interest rate cuts from the Federal Reserve.
The dollar came under renewed pressure after China accused the U.S. of exaggerating its rare earth export controls to stir panic, pushing back against calls to ease restrictions.
At the same time, S&P Global estimated that US President Donald Trump’s tariff measures could cost global firms around $1.2 trillion in 2025, with roughly two-thirds of the burden falling on consumers.
Dovish remarks from several Fed officials added fuel to the rally, as traders priced in two potential rate cuts this year.
Fed Governor Christopher Waller said on Thursday that “a 25 bps rate cut is justified at the upcoming meeting,” while Minneapolis Fed President Neel Kashkari cautioned there was “more risk of labour market negative surprise than an uptick in inflation”, signalling openness to further policy easing.
Still, gold’s momentum appeared to pause as hopes rose for a possible breakthrough in the Russia-Ukraine conflict.
The correction came after reports that U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy were set to meet in Washington on Friday to discuss military support and diplomacy.
Meanwhile, U.S. President Donald Trump said he spoke with Russian President Vladimir Putin and that the two leaders have agreed to meet in Budapest, Hungary, to discuss the war in Ukraine, though no date has been confirmed.
