Gold prices moved lower in Asian trading on Friday, extending losses for a second consecutive week, as the Federal Reserve’s cautious stance on further rate cuts and renewed optimism around U.S.-China trade relations curbed demand for the safe-haven asset.
By 01:49 ET (05:49 GMT), spot gold had fallen 0.4% to $4,008.65 per ounce, partially reversing Thursday’s sharp rally, while U.S. gold futures edged 0.1% higher to $4,019.90. Despite a strong session earlier in the week, the metal remained on track for a 2.6% weekly drop.
Fed caution and trade optimism weigh on bullion
The Federal Reserve cut its benchmark rate by 25 basis points on Wednesday to a range of 3.75%-4.00%, but Chair Jerome Powell cautioned that another reduction in December was “far from a foregone conclusion.”
Those comments lifted both Treasury yields and the U.S. dollar, diminishing gold’s appeal since it offers no yield.
Investor sentiment further improved after U.S. President Donald Trump said talks with China had made “amazing” progress and that a trade deal could come “pretty soon.”
During a meeting in South Korea on Thursday, Trump and Chinese President Xi Jinping agreed to cut a 10% tariff on fentanyl-related imports. China also pledged to resume soybean purchases from the U.S. and temporarily halt new restrictions on rare-earth exports.
The easing of trade tensions has reduced one of gold’s key supports, as investors shifted back toward risk assets amid hopes of a breakthrough deal.
Nonetheless, analysts said underlying uncertainty and steady central bank demand could help limit further downside for gold, even as short-term pressure persists.
Other metals steady; focus shifts to weak Chinese manufacturing data
Trading across the broader metals market was subdued. Silver futures slipped 0.3% to $48.48 per ounce, while platinum futures added 0.4% to $1,617.45.
Copper prices also weakened, with benchmark futures on the London Metal Exchange down 0.4% to $10,866.20 per ton, and U.S. copper futures falling 0.6% to $5.07 per pound.
Fresh economic data showed that China’s manufacturing sector contracted for a seventh consecutive month in October, highlighting ongoing challenges in the world’s second-largest economy. The weaker readings have fueled speculation that Beijing may soon introduce new stimulus measures to support growth.