Gold rebounds after Friday’s slump

LONDON (February 17) Gold  (XAU/USD)  prices rebounded on Monday after Friday’s sharp decline, as markets grappled with fresh trade threats from former President Trump. The precious metal climbed to $2,902.13 per ounce in London trading, partially recovering from its steepest single-day drop in two months.

Trump’s latest announcement of potential automotive tariffs, slated for April 2nd, has rekindled concerns about global trade tensions. However, market analysts suggest these threats might merely be negotiating tactics, pointing to his administration’s history of delayed implementation and numerous exclusions.

The precious metal’s appeal as a safe-haven investment continues to strengthen amid economic uncertainty. Friday’s disappointing US retail sales data, showing the largest decline in nearly two years, has renewed expectations for Federal Reserve rate cuts by September. Such monetary easing typically supports gold prices, as the metal becomes more attractive when interest rates fall.

Despite Friday’s tumble, gold achieved its seventh consecutive weekly gain – a feat not seen since 2020. Central bank purchases, particularly from China, coupled with growing investment in gold-backed ETFs, have helped drive prices to Tuesday’s record high of $2,942.68 per ounce.

As markets await clarity on Trump’s trade policies and the Federal Reserve’s next moves, gold’s trajectory remains closely tied to these macroeconomic developments. The interplay between trade tensions, monetary policy, and safe-haven demand continues to shape the precious metal’s outlook in 2025.

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