Gold rises as dollar, equities tumble

Fears of possible trade war, weak jobs data put markets on tenterhooks

Gold prices rose on Friday, as Wall Street stocks tumbled and the dollar fell as rhetoric from US President Donald Trump and Chinese officials fed worries about a possible trade war, and after US jobs data came in weaker than expected.

US stocks fell, with the Dow down more than 450 points, after Trump on Thursday threatened to slap $100 billion (Dh367.3 billion) more in tariffs on Chinese imports, and Beijing pledged a “fierce counter strike”.

Falling stock prices dragged the dollar against the yen and the euro. Also pressuring the US currency was data showing the US economy in March created the fewest jobs in six months, which might prompt the Federal Reserve to go more slowly on plans to raise interest rates.

Spot gold was up 0.5 per cent at $1,332.11 an ounce by 2.01pm EDT (1801 GMT). In early trade, it fell to a session low of $1,321.16, the lowest since March 21. US gold futures for June delivery settled up 0.6 per cent at $1,336.10.

Spot prices are up 0.6 per cent since last Friday, but well off last week’s highs. Gold has fluctuated as investors rated prospects of a US-China trade war. “We are moving back to a risk-off scenario today, but still stuck in a trading range between $1,300 and $1,360,” said Rob Haworth, senior investment strategist for US Bank Wealth Management.

“The market is paying very much attention to the dollar and bond market in terms of what the Fed is going to do.”

Small boost

“The payrolls report has provided a small boost to gold, but overall it’s had quite a dismal week,” Saxo Bank’s head of commodity strategy Ole Hansen said.

Silver was down 0.1 per cent at $16.33 an ounce, but on track to close up 0.2 per cent for the week. Platinum was up 0.3 per cent at $913 an ounce, but down 1.6 per cent for the week so far.

Palladium fell for the 11th straight session and was down 0.4 per cent at $901.30 an ounce, after falling to $895.47, the lowest since August 2017.

It was on track to end the week down 5.3 per cent.