A saleswoman selects gold necklaces in a jewellery showroom in India
A saleswoman selects gold necklaces in a jewellery showroom in India. Gold prices have been on the rise on concerns of a slowdown in the global economy, and trade and regional tensions. Image Credit: Reuters

London: Donald Trump and the Federal Reserve are messing with gold traders’ heads.

Bullion got whipsawed this week as comments from Federal Reserve Chairman Jerome Powell damped expectations for a lengthy easing cycle, while fresh US tariff threats a day later fuelled global-growth concerns that renewed demand for the metal as a haven.

Payrolls data Friday showing higher US wages and slower job gains did little to add clarity.

“We had a wild day in the markets yesterday, perhaps apt considering that this is the start of August when crazy things usually happen,” Ed Meir, an analyst at INTL FCStone, said in a report Friday. “Market conditions remain unsettled.”

The CBOE/Comex Gold Volatility Index, a measure of price swings on gold futures, rose to 11% on Friday, the most in six weeks. Spot gold slipped 0.5% at 9:40am in New York, while gold futures for December delivery advanced 1.2% on the Comex.

A US government report Friday showed average hourly earnings climbed 3.2% from a year earlier, better than forecast, while the three-month average increase in payrolls was the slowest in almost two years. That came a day after Trump said in a tweet he plans to impose a 10% tariff on $300 billion of Chinese imports beginning Sept. 1, and Beijing pledged to respond if he follows through.

“Basically, the US payrolls number didn’t really matter at all today because Trump has unleashed the beast on China,” Naeem Aslam, chief market analyst at ThinkMarkets, said by email Friday.