Gold prices surged on Thursday, recovering nearly all of this week’s earlier losses, as investors weighed mixed economic signals from the U.S. and growing doubts over peace talks between Russia and Ukraine.
Spot gold rose 1.9% to $3,240.87 per ounce by 5:40 p.m. ET, while U.S. gold futures settled 1.7% higher at $3,243.90 on the New York exchange.
The rebound was fueled by fresh U.S. economic data for April, which showed producer prices posted their steepest monthly decline in five years, while retail sales registered only a modest 0.1% gain. The weaker-than-expected data reinforced market expectations that the Federal Reserve could adopt a more dovish stance and consider cutting interest rates.
“Thursday’s data creates more room for the Fed to cut rates, with a more dovish expectation building in the market,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Earlier in the week, inflation data showed consumer prices rising less than anticipated, signaling potential room for the central bank to pause and assess further developments. Lower interest rates generally enhance the appeal of gold, which does not yield interest but is viewed as a safe-haven asset in times of uncertainty.
Gold Rises Over 22% in 2025 on Strong Demand
Gold prices have risen more than 22% so far in 2025, supported by renewed investor interest in bullion-backed exchange-traded funds (ETFs), continued central bank purchases, and strong speculative demand, particularly from China.
Geopolitical tensions also remain a key factor driving gold’s rally. Hopes for progress in the Russia-Ukraine peace process were dampened after Russian President Vladimir Putin declined to attend direct negotiations in Turkey, opting instead to send a lower-level delegation.
“Putin not attending the peace talks in Turkey dims expectations of progress towards a peace deal, which I think is helping to underpin gold prices today,” said Grant.
Outlook Remains Volatile as Investors Eye Support Levels
Despite Thursday’s gains, some analysts caution that gold could face further downward pressure if key support levels are breached. Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp., said gold could find support between $3,050 and $3,150, but a break below that range could trigger a deeper pullback toward $2,950 per ounce.
Investor sentiment also remains cautious as recent easing in U.S.-China trade tensions is underpinned by a temporary 90-day tariff truce, leaving room for future uncertainty.
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