Gold prices slipped further during Asian trading on Thursday, continuing the downward trend from earlier this week. The momentum came as a fresh U.S.-Japan trade agreement and upbeat tech earnings lifted investor confidence, reducing the traditional appeal of gold as a safe asset.
After reaching a one-month peak earlier this week, gold surrendered much of those gains on Wednesday and Thursday as market sentiment improved. Spot gold dropped 0.3% to $3,378.93 per ounce, while gold futures fell 0.4% to $3,384.60 per ounce by 01:50 ET (05:50 GMT).
Despite the retreat, gold has remained mostly confined within a $200 range throughout 2025, unable to reclaim the record highs above $3,500 per ounce hit in April. Still, demand holds up reasonably well given lingering economic uncertainties in the United States.
Trade Deal and AI Boost Risk Appetite, Pressuring Precious Metals
Investor appetite for risk was boosted by the U.S. and Japan’s newly inked trade deal, which sees Japanese exports subject to a 15% U.S. tariff, significantly lower than the 25% initially threatened by the Trump administration.
This agreement has fueled hopes of further trade accords before the August 1 deadline when increased tariffs on several major economies are set to kick in. Reports also suggest that the European Union is moving towards a similar deal with 15% tariffs, while a pact with India appears close to finalization.
Platinum prices dipped 0.4% to $1,416.99 per ounce, and silver dropped 0.6% to $39.06 per ounce, both pulling back from gains earlier this week.
Positive earnings from the technology sector have also lifted market mood. Alphabet (NASDAQ: GOOGL), the parent company of Google, surpassed expectations in its second-quarter results, driven by rising demand for AI technologies.
Optimism around AI was further heightened by President Trump signing three executive orders on Wednesday aimed at boosting the industry’s growth within the U.S. This, combined with enthusiasm about the Japan trade deal, pushed Wall Street to record highs on Wednesday.
Industrial metals gained alongside this improved sentiment. Copper futures on the London Metal Exchange inched up 0.1% to $9,942.75 per ton, while COMEX copper futures climbed 0.7% to $5.88 per pound, maintaining solid gains for the week.
China’s Gold Demand Falls More Slowly Thanks to Safe Haven Buying
China’s gold consumption declined by 3.5% year-on-year in the first half of 2025, a smaller drop compared to the 5.6% fall recorded in the same period last year, according to figures from the state-backed Gold Association.
The decline was mainly caused by weaker jewelry demand as consumers were deterred by rising bullion prices. However, strong institutional demand helped offset some of this, with investors increasing gold purchases amid ongoing trade and economic uncertainties.
As one of the world’s largest gold consumers, China’s People’s Bank is also believed to have increased its gold reserves in recent months.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.