Gold set for weekly rise; market awaits Trump's policy moves

Gold prices rose due to a weaker U.S. dollar and safe haven demand, with spot gold up 0.2% at $2,661.19 per ounce, marking a weekly gain of about 1.6%

Gold edged up on Friday on a softer U.S. dollar and safe haven flows, with the metal en-route for a weekly gain as attention turned to U.S. President-elect Donald Trump's proposed policy changes that could influence the economic and interest rate outlook going forward.

As focus shifted to U.S. President-elect Donald Trump's planned policy changes that might affect the future outlook for the economy and interest rates, gold gained ground on Friday due to a weaker U.S. dollar and safe haven flows. The metal is headed for a weekly gain(Representational Image/Pixabay)

Spot gold was up 0.2% at $2,661.19 per ounce, as of 0257 GMT, hitting its highest level since Dec. 13. Bullion is up about 1.6% for the week so far.

U.S. gold futures rose 0.2% to $2,675.40.

The dollar index fell 0.2%, making dollar-priced bullion more affordable for holders of other currencies.

"We have seen an uptick in safe haven flows, which has been to the benefit of gold," said Tim Waterer, chief market analyst at KCM Trade.

"Any pullback in the U.S. dollar could prove to be a catalyst for gold to breakout higher."

Trump's inauguration on Jan. 20 has heightened uncertainty, with his proposed tariffs and protectionist policies expected to be inflationary and potentially spark trade wars.

On the geopolitical front, Israeli airstrikes killed at least 68 Palestinians in Gaza.

Additionally, Russia launched a drone strike on the Ukrainian capital Kyiv on Wednesday, causing damage in at least two districts.

Gold flourishes in low interest rate environments and serves as a hedge against economic and geopolitical uncertainties.

Last month, the U.S. central bank delivered a third consecutive rate cut, but now projects only two reductions in 2025.

Markets now await U.S. job openings data, the ADP employment report, Fed meeting minutes, and the employment report, all due next week, for further direction.

"Global trends will continue to play a big role and continue to move the gold market forward. The metal will grow gradually, showing stable growth values throughout the year," said Julia Khandoshko, CEO at broker Mind Money.

Spot silver was steady at $29.58 per ounce, platinum added 0.4% to $926.95, and palladium rose 0.2% to $913.18. All three metals were on track of weekly gains.