WASHINGTON (dpa-AFX) - Gold prices fell on Friday and were set for their biggest weekly drop since November as the dollar held gains from the precious session amid heightened concerns over a potential global trade war.
Spot gold dipped half a percent to $2,863.06 per ounce in European trade while U.S. gold futures were down 0.7 percent at $2,875.41.
Gold has fallen 2.5 percent so far this week after eight consecutive weeks of gains but is set for a gain of about 2 percent for February.
The dollar was on track for a 0.7 percent gain this week, making bullion expensive for foreign buyers.
The dollar strengthened for a third straight session as traders grappled with U.S. President Donald Trump's new tariff threats.
China vowed to take 'all necessary countermeasures and defend its legitimate rights and interests' after Trump said he would impose an additional 10 percent tariff on Chinese imports, intensifying a brewing trade war between the world's two largest economies.
The additional tariff will come into effect on Tuesday alongside sweeping 25 percent levies on Canadian and Mexican imports.
If is feared that the U.S. trade war may hurt global growth, worsen inflation and possibly spark recessions in some countries.
Traders also awaited the release of the Federal Reserve's preferred inflation gauge, the PCE price index, later in the day for additional clues on the Fed's rate trajectory in 2025.
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