Gold Prices Rise Slightly as Fed Uncertainty and Trade Optimism Weigh on Outlook

Gold prices edged higher in Asian trading on Monday but continued to face headwinds after two consecutive weekly losses. The precious metal remains pressured by uncertainty over future U.S. interest rate cuts and easing geopolitical risks, which have curbed safe-haven demand.

Spot gold climbed 0.4% to $4,017.13 an ounce at 01:19 ET (06:19 GMT), while U.S. gold futures advanced 0.8% to $4,027.55. Despite a 2% decline last week — its second straight weekly drop — gold still managed nearly 4% in monthly gains for October, supported by earlier demand for safety amid market volatility.

The Federal Reserve’s decision to cut rates by 25 basis points last week initially buoyed gold prices, as lower interest rates typically benefit non-yielding assets. However, Fed Chair Jerome Powell’s cautious comments — stating that more rate cuts were “not a foregone conclusion” — dampened market optimism. His stance, echoed by other Fed officials, led investors to scale back expectations for another rate reduction in December. This shift strengthened the U.S. dollar, which hovered near three-month highs, making gold more expensive for foreign buyers.

Adding to gold’s weakness, U.S.-China trade tensions eased after Presidents Donald Trump and Xi Jinping met in Busan and pledged to reduce trade barriers. The talks included potential U.S. tariff reductions and increased Chinese imports of American goods, calming global markets and lowering demand for gold as a hedge.

Other precious metals outperformed gold. Silver futures rose 1.1% to $48.705 per ounce, and platinum jumped 1.8% to $1,603.60 per ounce. Meanwhile, copper prices were muted as China’s manufacturing sector showed slower-than-expected growth in October, highlighting ongoing challenges in the world’s second-largest economy.