Gold Holds Firm Near $5,190 as Trade Tensions and Fed Signals Drive Safe-Haven Demand

Gold prices steadied around $5,190 per ounce on Friday, extending a two-day rally and positioning for a fourth consecutive weekly gain, as investors balanced escalating trade tensions, geopolitical developments, and shifting U.S. Federal Reserve expectations.
 

Trade Policy Adds Support to Bullion

Fresh trade measures from Donald Trump have added a layer of uncertainty to global markets.

• A 10% universal tariff came into effect earlier this week.

• Duties could increase to 15% for select countries, following a recent Supreme Court of the United States ruling that blocked broader tariff expansions.

Historically, trade friction fuels volatility in equities and currencies — boosting safe-haven assets like gold.
 

Geopolitical Risks in Focus

Diplomatic developments are also influencing sentiment.

Washington and Tehran are set to resume negotiations next week, following what officials described as limited progress in recent talks. However, a U.S. source indicated negotiators left discussions disappointed, underscoring lingering uncertainty in the Middle East.

Geopolitical risks continue to act as a structural support for bullion.
 

Fed Signals: Mixed but Supportive

On the monetary policy front, investors are carefully parsing comments from Federal Reserve officials:

• Austan Goolsbee, President of the Federal Reserve Bank of Chicago, suggested rate cuts remain possible if inflation cools further.

• Governor Stephen Miran expressed support for a full 1-percentage-point rate cut in 2026.

However, market expectations have shifted:

• Probability of a rate cut by June has dropped to 50%.

• Bets on a third cut by year-end have largely disappeared.

Lower interest rates typically benefit gold, as they reduce the opportunity cost of holding non-yielding assets.
Ananlysis By- Shahzad Ahmad