Gold Prices Slip as Fed Caution and Trade Optimism Pressure Safe-Haven Demand
Gold prices fell in Asian trading on Friday, heading for a second straight weekly loss as the Federal Reserve’s cautious tone on interest rate cuts and renewed U.S.-China trade optimism reduced demand for the safe-haven metal.
Gold Retreats After Sharp Gains
Spot gold dropped 0.4% to $4,008.65 per ounce by 01:49 ET (05:49 GMT), giving back part of Thursday’s strong rally. U.S. gold futures inched 0.1% higher to $4,019.90.
Despite a 2% surge in the previous session, the metal was still on track for a 2.6% weekly decline.
Fed’s Policy Stance and Trade Progress Weigh on Gold
The Federal Reserve cut its benchmark rate by 25 basis points on Wednesday to a range of 3.75%–4.00%, but Chair Jerome Powell signaled uncertainty about further easing. He said a December rate cut was “far from a foregone conclusion.”
Those remarks boosted U.S. Treasury yields and the dollar, undermining gold’s appeal since the metal offers no interest returns.
Adding to the downward pressure, risk sentiment improved after U.S. President Donald Trump said trade talks with China were making “amazing progress” and that a potential deal could come “pretty soon.”
The two leaders met in South Korea on Thursday and agreed to cut a 10% tariff on fentanyl-linked imports. China also resumed U.S. soybean purchases and paused new rare-earth export curbs, signaling improved diplomatic momentum.
Easing trade tensions removed one of gold’s main supports as investors turned toward risk assets on renewed optimism. Still, analysts said central bank demand and global uncertainty could provide medium-term support, even if short-term sentiment remains weak.
Metal Markets Mixed as China’s PMI Weakens
Other precious and base metals traded in narrow ranges on Friday. Silver futures slipped 0.3% to $48.48 per ounce, while platinum futures rose 0.4% to $1,617.45 per ounce.
On the London Metal Exchange, copper futures fell 0.4% to $10,866.20 per ton, and U.S. copper futures declined 0.6% to $5.07 per pound.
Fresh data showed that China’s manufacturing PMI contracted for a seventh consecutive month, highlighting the country’s fragile industrial recovery. The weak reading added to speculation that Beijing may soon unveil new economic support measures to bolster growth.
