Gold on track for worst weekly performance in 2025

Gold prices fell in European trade on Friday and resumed the losses after a short hiatus yesterday, moving closer to five-week lows and on track for the worst weekly performance in 2025 on weaker haven demand as US-China trade tensions receded.

Most remarks by Fed officials this week were more bullish tann expected, tanking the odds of a Fed rate cut until October.

Prices

Gold prices fell 1.35% today to $3195 an ounce, with a session-high at $3252.

On Thursday, gold rallied 1.95% away from a five-week trough at $3120.99.

Weekly Trades

Gold prices are down 3.95% so far this week, on track for the third weekly loss in a month, and the heftiest in 2025.

Trade Developments

The US and China agreed to pause most tariffs for 90 days, in turn reducing the severity of the recent devastating trade war.

Trump said he doesn’t expect tariffs on Chinese products to return to 145% after the pause, and that he expects both countries to reach a final agreement.

US Rates

Chicago Fed President Austin Goolsby said the recent data that showed lower inflation doesn’t necessarily reflect the impact of the new US tariffs on imports, and the Fed requires more data to gauge the path ahead clearly.

Fed Deputy Governor Philip Jefferson said that latest inflation data shows progress towards achieving the 2% inflation target.

However, he believes the outlook has become unclear due to the latest tariffs and their potential impact on prices.

 According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in June stood at just 8%, and the odds of such a cut in July stood at 40%.

Traders are now pricing in 50 basis points of US interest rate cuts this year, likely starting next September.

Federal Reserve Chair Jerome Powell is scheduled to speak later today in Washington and could provide clues on the bank’s future monetary policy and thinking.

SPDR

Gold holdings at the SPDR Gold Trust fell 8.89 tons yesterday to a total of 927.62 tons, an April 8 trough.