Gold prices moved slightly higher on Thursday as investors evaluated developments from the high-profile meeting between Donald Trump and Xi Jinping, while persistent concerns over oil-driven inflation continued to influence sentiment toward precious metals.
Spot gold rose 0.3% to $4,700.25 an ounce by 02:56 ET (06:56 GMT), recovering modestly after losses over the previous two trading sessions. Meanwhile, U.S. gold futures slipped 0.2% to $4,697.97.
Investors Watch Trump-Xi Talks for Geopolitical Signals
Market participants remained cautious during the opening stage of the two-day summit between Trump and Xi.
During the talks, Xi Jinping said China and the United States had achieved “positive progress” in recent trade negotiations and emphasized that cooperation between the two countries would contribute to global stability.
Donald Trump described Xi as a great leader and stated that relations between the United States and China would be “better than ever before.”
Investors are closely watching for indications that both leaders may seek to ease geopolitical tensions that have unsettled commodity and currency markets in recent weeks.
Gold, traditionally viewed as a safe-haven asset during periods of geopolitical uncertainty, continued to receive support from concerns surrounding the Middle East conflict and disruptions affecting the Strait of Hormuz, the strategic shipping route responsible for transporting a significant portion of the world’s oil supply.
Inflation Concerns and Fed Expectations Limit Gold’s Upside
Despite geopolitical support, stronger inflation data in the United States and continued strength in the U.S. dollar limited gains in bullion prices.
U.S. producer prices accelerated in April at their fastest pace since 2022, while consumer inflation also exceeded expectations as higher energy costs linked to the Iran conflict filtered through the broader economy.
The inflation figures reinforced market expectations that the Federal Reserve may maintain elevated interest rates for a longer period, reducing the attractiveness of non-yielding assets such as gold.
The U.S. Dollar Index remained close to a two-week high following the inflation reports, adding pressure to bullion prices by making gold more expensive for international buyers.
Oil prices holding above $100 per barrel also remained a major concern for financial markets, as traders worried that prolonged supply disruptions in the Gulf region could intensify global inflation pressures further.
India Raises Import Duties on Gold and Silver
Markets were also assessing India’s decision to increase import duties on gold and silver to 15% from 6%, a measure aimed at reducing overseas purchases of precious metals and supporting the country’s foreign exchange reserves.
The higher tariffs could weaken physical demand in one of the world’s largest gold-consuming markets.
“India meets most of its gold demand through imports, with gold and silver accounting for nearly 11% of total imports. The tariff hike is likely to be a near-term headwind for physical gold demand in India, potentially tempering local buying and weighing on import flows,” analysts at ING Group said in a note.
Silver, Platinum and Copper Prices Retreat
Elsewhere in the metals market, silver prices declined 0.6% to $87.01 per ounce, while platinum slipped 0.4% to $2,128.60 per ounce.
Copper prices also moved lower, although they remained close to historic highs. Benchmark copper futures on the London Metal Exchange fell 1.3% to $13,953.33 per ton, while U.S. copper futures dropped 0.5% to $6.58 per pound.
LME copper had climbed as high as $14,191.48 per ton during Wednesday’s session, remaining near the all-time high of $14,531.70 per ton reached in late January.
“The move above $14,000/t highlights just how tight the copper market has become. Low inventories outside the US and ongoing disruptions across key producing regions leave prices increasingly sensitive to any incremental demand growth,” ING analysts added.