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What’s happening: Gold prices fell more than 1% on Friday mainly on profit taking by investors.
What happened: The safe-haven metal had surged to a record high on Tuesday last week amid concerns of a global trade war following US President Donald Trump’s tariff threats.
Although gold gave up some gains on Friday, the yellow metal ended the week in the green.
Why it matters: President Donald Trump instructed his team in a memo to develop plans for reciprocal tariffs on countries that have taxes on imports from the US. This fuelled concerns around inflation accelerating in the US and provided a boost to the demand for gold, which is widely considered a hedge against inflation.
Meanwhile, data released by the US showed retail sales declined the most in around two years in January, signalled a sharp downturn in economic growth during the first quarter of 2025. Retail sales fell 0.9% last month, versus market estimates of a 0.1% decline.
Both consumer price index and producer price index released last week exceeded market expectations, due to which the US Federal Reserve is expected to avoid interest rate cuts until September. A decline in weekly jobless claims also pointed at resilience in the country’s labour market.
Weakness in the US dollar lent support to gold prices, as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.5% to 106.79 on Friday.
US gold futures dipped around 1.5% to settle at $2,900.70 an ounce on Friday but still recorded gains for the week.
In other metals trading, silver rose to $32.855 an ounce, recording gains for the week. Platinum settled lower at $1,019.2, while palladium fell to $1,009.30 and copper declined to $4.6645.
What to watch: With no major economic reports scheduled for today, investors will continue monitoring tariff announcements by the Trump administration.
Context: Equity markets in Asia closed mixed on Friday as investors digested the recent tariff-related news from the US.
Details: US President Donald Trump announced 10% additional tariffs on Chinese exports. China responded by threatening retaliatory tariffs. Fears of a trade war between the world’s two largest economies hit market sentiment last week.
Trump also announced 25% tariffs on steel and aluminium, which took metal shares lower in the region.
The surge in Chinese tech stocks grabbed the spotlight last week, driven by the euphoria surrounding the launch of DeepSeek’s low-cost AI model. Hong Kong’s Hang Seng Tech Index jumping to its strongest level in three years last week.
China’s Shanghai Composite Index jumped 0.43% to 3,346.72 on Friday, while Hong Kong’s Hang Seng Index surged 3.69% to settle at 22,620.33.
Japan’s Nikkei 225 fell 0.79% to close at 39,149.43, while India’s BSE Sensex shed 0.26% to reach 75,939.21 on Friday.
Data released this morning showed that the Japanese economy expanded by 2.8% on an annualised basis during the fourth quarter. Although this came in-line with expectations, it marks an acceleration from the 1.7% growth recorded in the previous quarter. The Nikkei 225 adding around 0.1% this morning.
What to watch: Investors await the release of economic data on inflation rate and composite PMI from Japan later this week. The annual inflation rate in Japan, which accelerated to 3.6% in December from 2.9% in the previous month, is expected to rise further to 3.7% in January.
Analysts expect the au Jibun Bank Japan manufacturing PMI to increase to 49 in February, from 48.7 in January, while services PMI is projected to decline to 52.2 in February, from 53.0 in the previous month.
Data on house price index from China will also remain in focus.
Other Markets: US trading indices closed mixed on Friday, with the Dow Jones index and S&P 500 down by 0.37% and 0.01%, respectively, and the Nasdaq 100 up by 0.38%.
While US and Russian officials are scheduled to meet in Saudi Arabia to begin talks for ending the ongoing war, Ukraine has not been invited for the event. The news sent the RUB/USD pair higher in forex trading this morning.
Thailand’s GDP expanded by 3.2% year-over-year in the fourth quarter, up from 3.0% in the previous quarter, which lent support to the THB/USD forex pair.
Singapore’s non-oil domestic exports fell by 2.1% year-over-year in January, following a 9% increase in the previous month. The country’s non-oil domestic exports falling for the first time since last October sent the SGD/USD pair lower in forex trading this morning.
New Zealand’s number of visitor arrivals jumped by 12.2% year-over-year to 469,842 in December. This being the highest level since December 2019 lent support to the NZD/USD forex pair.
Saudi Arabia’s annual inflation rate rose to 2.0% in January, from 1.9% in the previous month. The latest reading coming in higher than market estimates of 1.9% sent the SAR/USD pair lower in forex trading this morning.
Italy’s balance of trade (1300 UAE Time), Spain’s balance of trade (1300 UAE Time), Eurozone’s balance of trade (1400 UAE Time), Brazil’s IBC-BR economic activity (1600 UAE Time), as well as Canada’s housing starts (1715 UAE Time) and foreign securities purchases (1730 UAE Time).
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