Gold set for seventh weekly gain as trade war risks lift demand

Gold prices held steady on Friday, and were poised for a seventh consecutive weekly gain, as U.S. President Donald Trump's plans to impose reciprocal tariffs on every country taxing U.S. imports fuelled concerns of a global trade war.

FUNDAMENTALS

* Spot gold held its ground at $2,929.02 per ounce, as of 0040 GMT, moving closer to its record peak of $2,942.70 hit on Tuesday.


* U.S. gold futures rose 0.4% to $2,957.50.

* Trump tasked his economics team with devising plans for reciprocal tariffs on every country taxing U.S. imports, and the targets include China, Japan, South Korea and the European Union.

* It was reported in the previous session that the U.S. producer price index (PPI) saw a strong increase in January, following an inflation report on Wednesday that revealed consumer prices had risen at the fastest pace in nearly a year and a half.

* The PPI data offered more evidence that inflation was accelerating again and strengthening financial market views that the Federal Reserve would not be cutting interest rates before the second half of the year.

* Fed's Chair Jerome Powell, at his second congressional hearing this week, reiterated that the central bank was in no rush to cut interest rates.

* Bullion is traditionally viewed as a safe haven against inflation and economic uncertainty, but the appeal of this non-yielding asset diminishes with rising interest rates.

* A surge in global gold prices, reaching record highs, has dampened jewellery sales during India's wedding season, while dealers in China have resorted to offering discounts to attract buyers.

* Spot silver fell 0.1% to $32.32 per ounce. Platinum was up 0.1% at $996.35 and palladium eased 0.3% to $991.26.

DATA/EVENTS (GMT) 1000 EU GDP Flash Estimate QQ, GDP Flash Estimate YY Q4 1100 EU Reserve Assets Total Jan 1330 US Import Prices YY, Retail Sales MM Jan 1415 US Industrial Production MM Jan