On Friday, April 25th, the price of gold dropped by 2%, with prospects of further decline for the week, while the US dollar strengthened. Beijing has also waived some tariffs on American goods, easing trade tensions and putting pressure on gold prices.
According to Reuters, as of 9:10 am Eastern Time, spot gold fell by 1.9% to $3,284.13 per ounce, marking a 1.2% decrease for the week. US gold futures also dropped by 1.6% to $3,294.50 per ounce.
“The easing of tariff issues has had a negative impact on gold prices… but so far, we have not seen large-scale liquidation,” said Daniel Ghali, a commodity strategist at TD Securities. “However, we know they have continued to buy on dips over the past few trading days, so we believe gold prices may regain momentum,” Ghali added.
Beijing announced on Friday that it would exempt high tariffs on some American imports. Business groups stated that certain American pharmaceuticals will not be subject to the 125% retaliatory tariff and can be exported to China.
Earlier this week, President Trump hinted at a potential de-escalation of the tariff war between the two countries, stating that direct negotiations are ongoing. Some reports suggest there are low-level talks between the US and China, improving risk appetite among traders and investors in the overall market.
In addition to trade tensions, other geopolitical issues are at play. US envoy Steve Whitkoof met with Russian President Putin in Moscow. Rumors are circulating that if Iran does not reach an agreement with the US on the nuclear issue, the US and Israel will destroy Iran’s nuclear capabilities.
Meanwhile, the US dollar rose, potentially marking the first weekly gain since March, making gold more expensive for overseas buyers.
Gold has traditionally been seen as a hedge against geopolitical and economic uncertainty. Influenced by the US-China trade tensions and strong central bank demand, gold hit a historical high of $3,500.05 per ounce, rising by over 25% so far this year.
Market analysts from City Index and FOREX.com, Fawad Razaqzada, mentioned, “Trade war concerns have been a major driver of gold buying in the past. But we may still need some time to see actual progress, so these concerns have not completely disappeared.”
In other metals, silver fell by 1.1% to $33.21 per ounce but is poised for a third consecutive week of gains. Platinum dropped by 0.5% to $965.75, and palladium fell by 1.5% to $939.82 per ounce.