Gold plunges 3% weekly as trade policies, recession fears fuel USD rally

• Gold drops over 1% Friday as USD strengthens, hitting 10-day high at 107.66.
• XAU/USD falls to $2,845 as Fed rate-cut bets rise
• Trump confirms 25% tariffs on Mexico and Canada, fueling market uncertainty.
• Fed expected to cut rates by 70 bps in 2025 with first cut projected for June.

Gold extended its losses on Friday, down more than 1% and over 3% in the week. The US Dollar rose to a ten-day peak of 107.66 amid fears of trade policies in the United States (US) and data that has sparked recessionary worries. The XAU/USD trades at $2,845 after reaching a daily peak of $2,885.

According to US President Donald Trump, 25% tariffs on Mexican and Canadian products will be applied next week on March 4. The release of the Federal Reserve’s (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, hinted that inflation continued progressing toward the 2% Fed goal.