Gold Prices Drop Sharply on Tariff and Rate Concerns: Gold prices declined at their sharpest
pace since December as investors evaluated the impact of new tariffs
announced by U.S. President Donald Trump and Federal Reserve monetary policy developments.
Silver also fell after reaching a three-month high.

Contents:

U.S. Retail Sales Decline

Investors Caught Between Gold and the Dollar

Gold Maintains Weekly Gains Despite the Drop

Precious Metals Performance

U.S. Retail Sales Decline Strengthens Rate Cut Bets

Data showed that U.S. retail sales in January recorded the steepest drop in two years,
reflecting a sharp pullback in consumer spending after a strong surge at the end of 2024.
This development increased expectations that the Federal Reserve may cut interest rates later this year.

At the same time, speculation has risen that Trump’s newly
threatened tariffs may primarily be a negotiation tool,
especially following his directive to impose retaliatory tariffs on a country-by-country basis.
This process could take significant time to implement.

Investors Caught Between Gold and the Dollar

While trade and geopolitical tensions typically drive investors toward gold as a safe haven,
analysts at Morgan Stanley, including Helen Amos,
noted that “some parts of the system appear somewhat strained,”
affecting investor sentiment toward the precious metal.

According to U.S. government data released on Friday,
fund managers reduced their bullish gold bets to a four-week low in the week ending February 11.

Gold Maintains Weekly Gains Despite the Drop

Despite the recent decline, gold remains on track for its seventh consecutive weekly gain,
marking its longest winning streak since 2020.
This rally has been partially supported by continued central bank purchases,
particularly from China, and increased gold-backed ETF holdings.

Precious Metals Performance

Spot gold dropped 1.6% to $2,882.57 per ounce by 4:58 PM in New York,
reducing its weekly gain to 0.7%.
The Bloomberg Dollar Index declined 0.3%, Silver fell 0.8% after reaching a three-month high earlier,
and Platinum and palladium also recorded slight declines.

Gold Prices Drop Sharply on Tariff and Rate Concerns

Gold Prices Drop Sharply on Tariff and Rate Concerns

Related Topics