Gold Slips Further as Trade Deal, AI Optimism Undermine Safe-Haven Demand
Gold prices declined in Asian trading on Thursday, extending recent losses as optimism surrounding a U.S.-Japan trade agreement and strong tech earnings drove investors toward riskier assets, weakening demand for traditional safe havens.
The precious metal gave back most of its earlier weekly gains, pulling back from a one-month high reached earlier in the week, as improving market sentiment reduced appetite for gold.
Spot gold dropped 0.3% to $3,378.93 per ounce, while gold futures fell 0.4% to $3,384.60/oz as of 01:50 ET (05:50 GMT).
Despite the recent pullback, gold continued to trade within a $200 range seen throughout most of 2025, struggling to regain the record highs above $3,500 reached in April. However, ongoing U.S. economic uncertainty has helped sustain underlying demand for the metal.
Trade Deal and AI Momentum Lift Market Sentiment
The broader precious metals market also came under pressure as risk appetite increased, largely due to the U.S.-Japan trade agreement. Under the new terms, Japan will face a 15% U.S. tariff—lower than the initially threatened 25%—on its exports.
The deal raised hopes that additional trade agreements could follow ahead of President Donald Trump’s August 1 tariff deadline. Reports indicated potential deals with the EU and India, both possibly at a 15% tariff level.
Platinum fell 0.4% to $1,416.99/oz, and silver declined 0.6% to $39.0645/oz, reversing part of their gains from earlier in the week.
Investor sentiment was further lifted by positive earnings in the tech sector, particularly a stronger-than-expected Q2 report from Alphabet (NASDAQ:GOOGL), fueled by surging demand for artificial intelligence (AI) technologies.
AI-related optimism was amplified after Trump signed three executive orders aimed at accelerating U.S. AI development. This combination of trade optimism and AI momentum helped push Wall Street to new record highs on Wednesday.
Industrial Metals Benefit from Risk-On Mood
Industrial metals gained ground as well. London copper futures edged up 0.1% to $9,942.75 per ton, while COMEX copper rose 0.7% to $5.8767 per pound, with both contracts maintaining strong weekly performance.
China’s Gold Demand Declines at Slower Pace
In China, gold consumption declined at a slower rate in the first half of 2025, supported by persistent safe-haven demand that partially offset softer demand for jewelry.
According to data from the state-backed China Gold Association, gold purchases totaled 505.205 metric tons, down 3.5% year-over-year, compared to a 5.6% drop in the same period of 2024.
The decline was largely driven by weaker jewelry demand, as elevated bullion prices discouraged retail buyers. However, strong institutional and central bank demand—driven by trade and economic concerns—helped cushion the decline. The People’s Bank of China is also believed to have been increasing its gold reserves in recent months.
