Gold Pulls Back After Record Midweek Performance

 

Gold Pulls Back After Record Wednesday Performance

(Bullion News Network) – Gold pulled back to end the week during a relatively subdued trading session on Friday. The metal moved little throughout the day, losing around $25 per troy ounce to log a second consecutive day of moderate losses. The pullback comes on the heels of another all-time high for the precious metal. On April 16th, gold reached its highest price ever at $3,357.40/ozt. Market uncertainty surrounding U.S. President Donald Trump’s tariffs on major trading partners has been the biggest story in the precious metals market this year. Fears that the White House’s aggressive economic policy could provoke a recession have wreaked havoc on Wall Street, triggering some of the stock market’s largest losses since the COVID-19 pandemic. Markets were closed today, which helps explain the muted trading session in the precious metals sector.

While President Trump placed a 90-day pause on the bulk of his administration’s tariffs, which applied to every major U.S. trading partner, an escalating trade war with China remains an acute concern for investors. CNN’s Fear and Greed Index currently finds a reading of 21, suggesting that markets are still being motivated by “extreme fear.” Safe haven demand, as measured by the ratio of returns between stocks and bonds, is at a multi-month high, and demand for gold remains elevated. During a speech to business leaders earlier this week, Federal Reserve Chair Jerome Powell said that the White House’s tariffs could present a “challenging scenario” for the central bank as it attempts to fulfill its dual mandate of lowering prices and maximizing employment.

Another leading U.S. bank raised its gold price forecast this week. On Thursday, Citi raised its three-month gold price forecast to $3,500/ozt, citing increased Chinese central bank buying and growing safe haven demand for the change. This move comes less than a week after Goldman Sachs extended its end-of-year gold price target to $3,700 for similar reasons. Both banks anticipate more buying action from central banks, particularly the People’s Bank of China (PBOC). Chinese investors continue to buy gold ETFs at record rates, the World Gold Council finds. Reuters reports that Chinese gold ETF purchases in April accounted for more shares than the entire first quarter of 2025, and leading banks like Citi and Goldman Sachs expect this trend to continue throughout the year.

Markets are gearing up for a busy couple of weeks for economic data. Next week, headlining data reports include the U.S. leading economic indicators report, the S&P flash U.S. services and manufacturing PMIs, initial jobless claims, and the final April consumer sentiment reading. These reports could give traders more insight into how the Federal Reserve may vote during its upcoming May meeting. For now, CME FedWatch projects an implied probability of only 13.2% that the FOMC will move to cut interest rates by 25 basis points. This projection is up from yesterday’s 9.1% but down from 18.8% one week ago. Fed Chair Powell emphasized earlier this week that the Fed is prepared to adjust its monetary policy as needed, depending on the economic outlook and key employment and inflation data. 

In other news, silver is set to end the week flat at $32.58/ozt after shedding $0.24 per troy ounce today. The gold-silver ratio changed little on Friday, settling just under 102:1. Platinum and palladium also saw minimal price action on Friday, with both platinum group metals hovering just under $1,000/ozt.