US President Donald Trump and British Prime Minister Keir Starmer announced a limited bilateral trade deal on Thursday that leaves in place a 10% tariff on goods imported from the UK. Adding to this, US Commerce Secretary Howard Lutnick told CNBC that Washington will roll out dozens of trade deals over the next month, though a 10% tariff imposed on most countries will likely stay.

Furthermore, the Trump administration is reportedly considering lowering the tariffs on China to 50% from 145% as soon as next week, which adds to the market optimism and might cap the XAU/USD pair. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are set to meet their Chinese counterparts in Switzerland on Saturday to discuss trade and economic issues.

The Federal Reserve indicated on Wednesday that it is not leaning towards cutting interest rates anytime soon despite the increasing uncertainty about the economic outlook. This allows the US Dollar to build on its recent bounce from a multi-year low and climb to a four-week top during the Asian session on Friday, and contributes to driving flows away from the non-yielding Gold price.

Russia and Ukraine both reported attacks on their forces on the first day of a three-day unilateral ceasefire called by Russian President Vladimir Putin. Furthermore, Israel’s escalation with Iran-backed Houthis in Yemen and fears of a wider military conflict along the India-Pakistan border keep geopolitical risks in play. This, in turn, could lend some support to the safe-haven precious metal.

A slew of influential FOMC members are due to speak on Friday. Investors will look for more cues about the Fed's future rate-cut path, which, in turn, will play a key role in driving the USD demand and provide a fresh impetus to the commodity, which remains on track to post modest weekly gains.

FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

(An automation tool was used in creating this post.)

Author

FXStreet Team

FXStreet

EUR/USD turns negative around 1.1600

EUR/USD is once again under selling pressure, sliding back towards the key 1.1600 support area amid a renewed upswing in the US dollar. The greenback has gathered further momentum after President Trump voiced praise for Kevin Hassett in connection with the Fed chair role.

GBP/USD trims gains, back below 1.33400

The current rebound in the Greenback prompts GBP/USD to surrender a big chunk of its earlier gains and slip back below the key 1.3400 mark on Friday. The marked bounce in the US Dollar followed the markets’ reaction to the likelihood that K. Hasset could become the next Fed Chief.

Gold weakens below $4,600 on USD rebound

Gold adds to Thursday’s small decline and breaks below the $4,600 mark per troy ounce at the end of the week. The precious metal’s corrective move comes on the back of easing geopolitical tensions and the late improvement in the Greenback.

Crypto Today: Bitcoin, Ethereum, XRP hold support amid waning retail demand

Bitcoin slips but holds above $95,000, weighed down by declining retail demand. Ethereum trades narrowly between the 100-day EMA support and the 200-day EMA resistance. XRP edges lower for the third consecutive day, driven by a persistently weakening derivatives market.

Week ahead – US PCE and Davos in focus for Dollar traders – BoJ meets

US PCE, PMIs and remarks from Davos could impact Fed cut bets. BoJ to stand pat; focus to fall on guidance after election reports. UK CPI and retail sales data may confirm bets of more BoE cuts.

Dash Price Forecast: DASH defies headwinds, paces toward $100

Dash extends its rally, reaching an intraday high of $96.85 despite the broader crypto market correcting. Retail interest in DASH explodes as futures Open Interest soars to $165 million.