Gold prices fall on profit-taking as US data, trade tensions loom

Gold prices fell about 1 per cent on Thursday as investors booked profits following a three-day rally, with markets eyeing US jobs data for clues on the Federal Reserve's rate path amid rising global trade tensions.

Spot gold, which dipped 0.5 per cent to $2,904.51 an ounce as of 1211 GMT, has gained over 10 per cent year-to-date. It hit a record high of $2,956.15 on February 24.

US gold futures also dropped 0.5 per cent to $2,912.10.

"Gold seems to be experiencing profit-taking as investors closely watch tariff developments with prices trading toward $2,900 ahead of the non-farm payrolls report," Lukman Otunuga, senior research analyst at FXTM, said.

 

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Market focus is pinned on an escalating global trade war after the US imposed 25 per cent tariffs on imports from Mexico and Canada on Tuesday along with fresh duties on Chinese goods.

Asian stocks rose as investors held out hope that trade tensions could ease after US President Donald Trump exempted some automakers from tariffs for a month. 

Investors turn to gold as a safe haven asset when geopolitical and economic uncertainties loom.

"Unless there is a fresh direction catalyst, the current bearish price action may drag gold lower. Should prices break below the $2,900, this may signal further downside toward $2,880," Otunuga said.

The spotlight is on Friday's non-farm payrolls report, which is expected to show a gain of 160,000 jobs for February, economists polled by Reuters said.

Meanwhile, platinum prices were flat at $964.68 per ounce.

"We look for platinum to be undersupplied by 500,000 ounces, or 6.4 per cent of demand, in 2025, keeping the metal in a deficit for a third consecutive year," UBS said in a note.

"Our market deficit should further reduce the above-ground inventories below 3 million ounces and help prices to move to USD 1,100/oz this year."

Spot silver dipped 0.7 per cent to $32.39 an ounce and palladium shed 0.5 per cent to $937.74.a