Gold Prices Edge Higher After Weekly Losses as Rate Uncertainty and Trade Optimism Weigh
Gold prices rose slightly on Monday, recovering modestly after two consecutive weeks of declines. Investors remained cautious amid uncertainty over future U.S. interest rate cuts and easing trade tensions between the United States and China, both of which have limited demand for the traditional safe-haven metal.
At 08:00 ET (13:00 GMT), spot gold increased 0.3% to $4,014.18 per ounce, while U.S. gold futures climbed 0.7% to $4,025.50 per ounce. Despite last week’s 2% decline, gold still posted a 4% monthly gain for October.
Fed Rate Uncertainty Pressures Gold
Gold’s recent weakness comes even after the Federal Reserve cut interest rates by 25 basis points last week — a move that typically benefits non-yielding assets such as gold.
However, Fed Chair Jerome Powell emphasized that further cuts were “not a foregone conclusion,” cooling investor optimism. His remarks, echoed by several Fed officials, led traders to scale back expectations for another rate cut in December, which in turn boosted the U.S. dollar and pressured gold prices.
The U.S. Dollar Index hovered near a three-month high on Monday, making gold more expensive for overseas buyers and limiting upside momentum in bullion.
Easing Trade Tensions Dampen Safe-Haven Demand
The outlook for gold was also restrained by a thaw in U.S.-China trade tensions. A recent meeting between President Donald Trump and President Xi Jinping in Busan ended with both leaders agreeing to reduce trade barriers. The discussions included potential U.S. tariff rollbacks and China’s commitment to increase imports of American goods.
Although the talks stopped short of a comprehensive trade agreement, the progress helped ease market anxiety, softening safe-haven demand for gold.
In addition, sentiment weakened after China removed a tax rebate on some gold retailers, effectively ending a VAT offset for gold purchased through the Shanghai Gold Exchange. According to ING analysts, this policy change makes gold purchases more expensive for Chinese consumers, reducing domestic demand.
Other Metals Mixed as China Data Disappoints
Elsewhere, silver futures rose 0.7% to $48.495 per ounce, and platinum gained 1.8% to $1,604.25 per ounce. However, industrial metals traded mixed following disappointing Chinese manufacturing data.
Copper futures on the London Metal Exchange added 0.2% to $10,910.95 per ton, while U.S. copper futures edged 0.4% higher to $5.1080 per pound.
A private survey showed that China’s manufacturing sector expanded less than expected in October, as producers faced falling prices and a weakening economic outlook. The China Nonferrous Metals Industry Association urged the government to limit new copper, zinc, and lead smelting projects amid overcapacity and record-low refining margins.
If implemented, analysts at ING said the policy would represent China’s largest intervention in the metals sector since aluminium output caps in 2017.
