Gold prices declined sharply in Asian trading Friday, with the yellow metal set for its steepest weekly decline since November 2024. Investors shed safe-haven assets as renewed optimism over U.S.-China trade relations and steady U.S. dollar strength weighed on bullion.
Spot gold dropped 0.8% to $3,214.90 an ounce, while futures for June delivery slipped 0.3% to $3,217.65 by 01:27 ET (05:27 GMT). The metal has now retreated 3.2% this week, its worst performance in over six months.
Driving the slide was a tentative deescalation in the prolonged U.S.-China trade conflict, after both nations agreed to temporarily reduce tariffs on selected goods. This development rekindled risk appetite across global markets, sparking a rally in equities and other risk-sensitive assets.
Despite the pullback, gold remains comfortably above the psychologically significant $3,000 level, with investors eyeing fresh catalysts such as key U.S. economic data and Federal Reserve commentary.
Traders Eye U.S. Data, Fed Stance
While risk appetite improved on the back of trade relief, U.S. Treasury yields firmed, exerting further downward pressure on non-yielding bullion. Simultaneously, the U.S. dollar remained resilient, adding to gold’s headwinds.
Investor sentiment was also tempered by uncertainties surrounding U.S. economic growth, fueled by a batch of soft data releases. This has led to renewed debate over the Federal Reserve’s policy trajectory, with markets now pricing in a 74% chance of a 25 basis-point rate cut in September, according to LSEG data.
Key takeaways for investors:
- Spot gold down 3.2% for the week
- Dollar strength and higher yields weigh on bullion
- Fed Chair Powell’s speech in focus later today
- Markets await U.S. PPI and retail sales data
Though the immediate risk rally appears to have cooled by Friday, traders remain cautious, seeking clarity on a more permanent U.S.-China trade settlement.
Industrial Metals Retreat Amid China Focus
Other precious metals mirrored gold’s weakness:
- Platinum futures fell 0.5% to $989.90 an ounce
- Silver futures edged down 0.3% to $32.593 an ounce
Industrial metals also drifted lower, with copper slipping 0.2% to $9,567.30 a ton on the London Metal Exchange, while U.S. copper futures settled at $4.6695 a pound.
Attention now shifts to China’s economic calendar next week, featuring critical data on industrial production and retail sales. Additionally, markets are closely watching the People’s Bank of China’s loan prime rate decision, as speculation grows over potential monetary easing to support growth.