Spot gold slipped 0.8% to $3,214.90 per ounce, while June gold futures edged 0.3% lower to $3,217.65 as of 01:27 ET (05:27 GMT). The metal has lost approximately 3.2% so far this week—its sharpest weekly drop in over six months—after pulling back from recent record highs.
Safe-Haven Demand Weakens on Trade Truce
The downturn in gold prices comes amid renewed optimism in global markets following a temporary trade truce between Washington and Beijing. The two economic powerhouses agreed earlier this week to reduce tariffs on each other, signaling a de-escalation in their prolonged trade conflict.
The development lifted market sentiment and spurred a rally in risk-sensitive assets, reducing demand for traditional safe-haven investments like gold. Analysts noted that investors were quick to lock in profits following the metal’s recent surge to all-time highs.
Adding to the pressure on gold were gains in the U.S. dollar and a rise in Treasury yields, which dampen the appeal of non-yielding assets. Still, despite this week’s pullback, gold prices remain comfortably above the key $3,000 level.
Outlook Clouded by U.S. Data and Unresolved Trade Issues
While the initial risk-on sentiment has begun to fade, traders remain cautious amid ongoing global uncertainties. The partial trade accord between the U.S. and China has sparked hopes for more comprehensive deals, though a long-term resolution remains elusive.
A spate of disappointing U.S. economic data has also introduced renewed doubts over the strength of domestic growth, potentially supporting gold in the medium term should economic conditions deteriorate.
Other Precious and Industrial Metals Weaken
Weakness in gold spilled over into other precious metals. Platinum futures declined 0.5% to $989.90 per ounce, while silver futures dropped 0.3% to $32.593.
Copper prices also moved lower on Friday, although they held onto modest weekly gains amid improved sentiment toward China, the world’s largest consumer of the industrial metal. London Metal Exchange (LME) copper futures fell 0.2% to $9,567.30 a ton, while U.S. copper futures slipped 0.2% to $4.6695 per pound.
Market attention is now turning to a string of key Chinese economic releases next week, starting with industrial production and retail sales data on Monday. The People’s Bank of China is also set to announce its loan prime rate decision on Tuesday, with traders watching closely for signs of additional stimulus as Beijing aims to bolster growth.
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