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What’s happening: Gold prices recorded gains on Friday, surging for the sixth straight week.
What happened: Rising trade concerns between the US and China resulted in investors flocking to the safe-haven asset.
Investors also responded to disappointing nonfarm payrolls (NFP) data released by the US.
Why it matters: US President Donald Trump reiterated his threat of new tariffs on China, while announcing a delay in tariffs on Mexico and Canada by a month. China responded by threatening retaliatory tariffs on US imports. Investors sought refuse in gold on fears of a trade war between the world’s two largest economies.
The yellow metal has been benefiting from continued growth in China’s gold holdings as well as China’s program to allow insurance funds to make gold investments.
Meanwhile, data from the Labor Department showed that the US economy created 143,000 jobs in January, down from 307,000 job adds in the previous month. The figure also came in much lower than market expectations of 170,000 job adds.
The unemployment rate came in at 4%, versus market estimates of 4.1%. Average hourly earnings for all employees rose by 0.5% to $35.87 in January, the most since August 2024.
While a weaker labour market should have increased the prospects of the Federal Reserve cutting interest rates, markets widely expect the US central bank to move with caution due to the uncertainties surrounding tariffs and their inflationary impact.
Strength in the US dollar weighed on gold prices, as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.4% to 108.10 on Friday.
US gold futures gained 0.4% to close at $2,887.60 an ounce on Friday, recording. For the week, the yellow metal gained around 2%.
In other metals trading, silver settled at $32.443, while platinum and palladium closed at $1,020.8 and $978.00, respectively.
What to watch: Investors await the release of economic data on US consumer inflation expectations (2000 UAE Time) today. US consumer inflation expectations for the year ahead, which came in unchanged at 3% in December, are projected to increase to 3.1% in January.
Markets will also continue monitoring Trump’s announcements related to tariffs.
Context: Equity markets in Europe declined on Friday but recorded a weekly gain, as investors assessed corporate earnings reports and the central bank’s monetary policy outlook.
Details: Stock markets in Europe settled at a record high on Thursday, cutting losses recorded earlier during the week amid concerns over a possible trade war between the US and China.
Investors also responded to key earnings reports last week and the Bank of England’s interest rate decision.
On Friday, shares of L’Oréal fell around 4% on Friday after the company disclosed its slowest quarterly sales growth since the pandemic. Porsche’s stock tanked more than 7% after the company issued a weak sales forecast for 2025. Banco Sabadell’s shares also edged lower, despite the company recording a 75% jump in net profits for the fourth quarter.
The UK central bank slashed its key rate by 25 basis points last week. Policymakers also signalled further cuts ahead in 2025. However, Bank of England lowered its growth estimates for the country for 2025 to 0.75%, from its earlier projection of 1.5%.
The STOXX Europe 600 Index fell 0.38% to close at 542.75 on Friday. For the week, the stock indices gained around 0.54%.
London’s FTSE 100 fell 0.31% to close at 8,700.53 on Friday, while Germany’s DAX 40 and France’s CAC 40 lost 0.53% and 0.43%, respectively.
What to watch: With no major economic reports scheduled from the Eurozone today, investors await data on GDP growth rate and employment change later this week. The Eurozone economy is expected to expand by 0.9% year-over-year in the fourth quarter, matching the pace of the previous quarter.
Analysts expect Eurozone’s employment to increase by 1.1% year-over-year in the fourth quarter, following a 1% gain in the previous quarter.
Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and the Nasdaq 100 down by 0.99%, 0.95% and 1.30%, respectively.
US President Donald Trump spoke with Russian President Vladimir Putin about ending the three-year war with Ukraine. The news sent the RUB/USD pair lower in forex trading this morning.
Australia’s private house approvals fell by 3.0% to 8,715 units in December, following a 1.7% decline in the previous month. The region’s private house permits falling for the third straight month exerted pressure on the AUD/USD forex pair.
Japan’s current account surplus widened to ¥1,077.3 billion in December, from ¥914.5 billion in the year-ago month. However, the latest reading came in short of market expectations of ¥1,362 billion, sending the JPY/USD pair lower in forex trading this morning.
Indonesia’s motorbike sales fell by 6.0% year-over-year to 557,191 units in January, after a 5.5% decline in the previous month. The region’s motorbike sales declining for the third month in a row exerted pressure on the IDR/USD forex pair.
China’s annual inflation rate accelerated to 0.5% in January, from 0.1% in December. The latest reading also came in higher than market estimates of 0.4%, which sent the CNY/USD pair lower in forex trading this morning.
Mexico’s auto exports (1600 UAE Time) and auto production (1600 UAE Time), Brazil’s car production (1700 UAE Time) and new car registrations (1700 UAE Time), Bank of Canada’s market participants survey (1930 UAE Time), as well as US 3-month bill auction (2030 UAE Time) and 6-month bill auction (2030 UAE Time).
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