Gold prices edged lower on Friday and were on track for their steepest weekly decline in six months, as easing U.S.-China trade tensions and a stronger U.S. dollar reduced demand for the precious metal’s safe-haven appeal.
Spot gold slipped 0.1% to $3,235.59 per ounce as of 0027 GMT, putting it on course for a weekly loss of over 2%—its worst weekly performance since November. Meanwhile, U.S. gold futures inched up 0.4% to $3,239.20 per ounce.
The U.S. dollar rose 0.4% for the week, on track for a fourth consecutive weekly gain. A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies, further pressuring bullion prices.
Gold’s recent slide follows news earlier this week that the United States and China have agreed to temporarily reduce retaliatory tariffs, easing fears of a prolonged trade war and its associated risks of a global recession. This de-escalation reduced investor demand for gold, which is often sought during periods of geopolitical and economic uncertainty.
Economic data released this week further dampened gold’s outlook. U.S. producer prices unexpectedly fell in April, and retail sales growth also slowed, signaling potential softness in consumer demand. Additionally, consumer price data came in below expectations, reinforcing views that inflation pressures may be easing.
Federal Reserve Governor Michael Barr noted on Thursday that the U.S. economy remains on solid footing and is progressing toward the central bank’s 2% inflation target. However, he also acknowledged that trade policy uncertainty continues to cloud the economic outlook.
Markets are currently pricing in 57 basis points of interest rate cuts in 2025, with expectations that the Federal Reserve could begin easing as early as September. Lower interest rates generally support gold prices, as they reduce the opportunity cost of holding non-yielding assets like bullion.
“While imminent concerns have eased, risks remain in terms of tariff implementation and the fact that even reduced tariffs pose inflation risks and could weigh on demand,” said Suki Cooper, precious metals analyst at Standard Chartered, in a note to clients.
Other Precious Metals
Silver dipped 0.2% to $32.61 per ounce.
Platinum rose 0.3% to $992.55 per ounce.
Palladium fell 0.7% to $961.50 per ounce.
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