Gold prices fell by 2% on Friday, heading for a weekly dip, as the dollar rose and news of easing U.S.-China trade tensions affected investor sentiment. A report that Beijing had exempted some U.S. goods from its tariffs weighed on bullion, with spot gold dropping 1.7% to $3,292.99 an ounce as of 1:39 a.m. EDT (1739 GMT). Earlier in the session, gold had fallen as much as 2%. The precious metal is down 1.2% for the week.
Impact of Dollar and U.S.-China Trade Developments
U.S. gold futures settled 1.5% lower at $3,298.40. According to TD Securities commodity strategist Daniel Ghali, the apparent de-escalation in the U.S.-China trade war is negatively affecting gold prices. However, Ghali noted that there have not been substantial liquidations, and continued buying on dips could allow gold to resume its upward trajectory.
Earlier this week, China announced it is considering exempting certain U.S. imports from its 125% tariffs and asked businesses to identify goods that could be eligible for the exemptions. President Donald Trump also suggested a de-escalation of the trade conflict, indicating that direct talks between the U.S. and China are already underway.
Effect of Stronger Dollar on Gold
The U.S. dollar rose on Friday, heading for its first weekly gain since March, making gold more expensive for overseas buyers. Gold, traditionally seen as a hedge against geopolitical and economic uncertainty, had previously hit a record high of $3,500.05 per ounce and has gained more than 25% this year, largely driven by U.S.-China trade tensions and strong demand from central banks.
Market Analysts’ View on Gold’s Future
Fawad Razaqzada, market analyst at City Index and FOREX.com, emphasized that trade war concerns were the primary driver for gold buying earlier in the year. While the recent easing of tensions may affect gold’s short-term trajectory, Razaqzada cautioned that it could still take time for the trade dispute to fully resolve, leaving some uncertainty in the market.
Performance of Other Precious Metals
Elsewhere, other precious metals also saw price declines. Spot silver slipped 1.6% to $33.03 an ounce but was on track for its third consecutive week of gains. Platinum fell 0.5% to $965.53, and palladium dipped 1.8% to $936.89.