WASHINGTON (dpa-AFX) - Gold prices registered sharp gains on Friday amid a weaker US dollar, ongoing tariff uncertainty, and the intensifying Russia-Ukraine war.
Front Month Comex Gold for September delivery jumped by $38.40 (or 1.03%) to $3,775.30 per troy ounce. Trading on the upside for six consecutive weeks, gold soared by $103.80 (or 2.83%) per troy ounce this week.
Front Month Comex Silver for September delivery surged by $1.524 (or 3.41%) to $46.221 per troy ounce. Silver skyrocketed by $3.6850 (or 8.66%) per troy ounce for this week, moving higher for the sixth straight week.
The US Federal Reserve cut interest rates by 25 basis points on September 17.
On Tuesday, Fed Chair Jerome Powell stressed the risks that aggressive cuts can pose for inflation. However, markets continued to price in additional two cuts this year and another one, next year.
Yesterday's Labor Department data which revealed that initial jobless claims fell by 14,000 from the previous week to 218,000 and a Commerce Department report which showed that the economy expanded an annualized 3.8% in the second quarter of 2025 tempered those expectations.
Today, the much-awaited core PCE index (that excludes volatile and energy prices) in the US - the chosen measure of inflation for the US Federal Reserve - was released by the US Commerce Department.
The index went up 0.2% in August compared to the previous month and jumped by 2.9% year-on-year, in line with estimates.
For the month of August, the US PCE price index went up 0.3% month-over-month and increased 2.7% year-on-year.
Prices for goods rose 0.1%, rebounding from a 0.1% dip in the previous month, while services cost rose 0.3%.
The relatively benign PCE data is keeping the expectations alive for rate cuts.
According to CME Group's FedWatch Tool, investors are betting on an 89.8% chance of a 25-basis-point interest rate cut at the October 28-29 Federal Reserve meeting.
In a new development, US President Donald Trump has announced tariffs up to 100% on imports of patented and branded pharmaceutical drugs, starting October 1.
These come at a time when the validity of the 'reciprocal tariffs' is under the legal scrutiny after they were deemed 'illegal' in a lower court. The US Supreme Court begins hearings by November and may deliver a verdict in mid-2026. Until then, markets are bound to remain uncertain.
Internally in the US, devoid of money to run the administrative machinery after September 30, the US government is facing a shutdown threat.
The proposal by Republicans for a temporary funding bill to run the government machinery beginning October has been outrightly rejected by Democrats as they obstinately demand changes to healthcare funding and Medicaid cuts.
Central banks of major nations continue purchasing gold. However, demand for jewelry gold - the main source of physical demand - fell 14% to 341 tons in the second quarter of 2025 due to exorbitant price of gold, according to the World Gold Council.
In Europe, the Russia-Ukraine war is getting more fierce day by day. While Ukrainian naval drones hit Russian ports in Novorossiysk and Tuapse targeting Russian oil major Transneft's terminals, Russia has attacked Ukraine's power installations.
The geopolitical tensions and the tariff uncertainty is helping the yellow metal on the upside.
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