Gold price falls 2% on US-China trade agreement
me-metals: Gold prices fell by nearly 2% on Friday, tracking towards a second straight weekly loss, as news of a US-China trade agreement diminished investors’ appetite for the safe-haven metal.
According to me-metals cited from mining.com, Spot gold traded as low as $3,256.23 per ounce during morning session. By midday, it had narrowed its loss to 1.6% at $3,272.55 an ounce.
Meanwhile, US gold futures recorded a 2% decline, trading at $3,279.20 per ounce in New York.
With Friday’s drop, bullion has now lost 3% for the week, as investor concerns eased following the latest developments on the geopolitical front.
On Thursday evening, the US and China agreed on the frameworks of a trade deal, improving the market sentiment. The ceasefire agreement between Iran and Israel earlier this week had already eroded demand for gold.
“The slowdown in geopolitics has offered an opportunity for investors to start taking profit because of the forward-looking prospects of some kind of kinetic war with China and the developments in the Middle East,” Daniel Pavilonis, senior market strategist at RJO Futures, told Reuters.
Still, gold remains up more than a quarter this year, and is about $200 away from its record high reached in April.
Along with geopolitical and trade tensions, the precious metal has been supported by robust central bank buying and increased optimism of a Federal Reserve rate cut, a tailwind for the non-interest-bearing bullion.
New US data released Friday showed an unexpected fall in consumer spending and a moderate inflation increase for the month of May, both supporting the case for the US central bank to begin monetary easing.
Traders added to bets the Federal Reserve will lower short-term borrowing costs by 75 basis points in 2025 following the latest data, according to Reuters.
source: mining.com
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