The precious metal extends its winning streak for a third straight session as trade war fears trump Fed hawkishness.
Gold bulls had plenty to celebrate on Friday as the yellow metal posted another solid gain, rising 0.3% to $3,332.73 per ounce by 0423 GMT.
United States futures weren't far behind, adding 0.5% to $3,343.70 in what's shaping up to be a defining week for precious metals sentiment.
The catalyst? President Trump's latest tariff salvo, which saw him announce a hefty 35% levy on Canadian imports effective 1 August, alongside threats of blanket 15-20% duties on most other trading partners.
Trade War 2.0 kicks into high gear
Trump's Thursday announcement as just the latest in a blitz of over 20 tariff notices since Monday, each one adding another layer of uncertainty to an already fragile global trade framework.
For gold, uncertainty is pure oxygen.
The market's response has been predictable: investors are once again seeking refuge in traditional safe havens as the specter of a renewed trade war looms large.
With memories of 2018-2019's market volatility still fresh, there's little appetite for risk-taking when geopolitical tensions are running this hot.
Fed holds its ground
Federal Reserve minutes from June painted a clear picture: most policymakers remain deeply concerned about inflation risks stemming from Trump's aggressive trade policies.
Only "a couple" of officials even entertained the possibility of rate cuts this month—hardly the dovish pivot gold bulls were hoping for.
Recent economic data hasn't helped the case for monetary easing either.
Initial jobless claims dropped to 227,000 last week, well below expectations and underscoring the labor market's continued resilience.
Combined with last Thursday's robust employment figures, the Fed has little justification for changing course.
However, Fed officials are singing from different hymn sheets.
San Francisco Fed President Mary Daly suggested it's "time to think about adjusting" interest rates, noting that tariff impacts haven't reached the feared levels.
Governor Christopher Waller went further, advocating for July rate cuts while arguing that tariff-driven inflation would prove transitory.
But St. Louis Fed President Alberto Musalem struck a more cautious tone, insisting it's "too soon to tell" whether tariffs will have lasting inflationary consequences.