Gold Slumps as US-China Trade Truce Dents Safe-Haven Demand

Gold prices declined in Asian trading on Friday, with spot gold dropping 0.8% to $3,214.90 per ounce and June futures down 0.3% to $3,217.65. The precious metal is on track for its steepest weekly loss since November 2024, falling about 3.2% as easing tensions between the U.S. and China reduced demand for safe-haven assets.

The recent agreement between Washington and Beijing to temporarily lower trade tariffs boosted global risk appetite, prompting a rally in equities and risk-driven assets. This shift in sentiment led traders to lock in profits from gold’s recent record highs. Additionally, strength in the U.S. dollar and rising Treasury yields applied further downward pressure on gold prices.

Despite the decline, gold remains above the key $3,000/oz level. Market participants are cautiously awaiting a more definitive trade resolution between the U.S. and China, while soft U.S. economic data continues to cloud the growth outlook.

Other precious metals also faced losses. Platinum futures fell 0.5% to $989.90/oz, and silver futures slipped 0.3% to $32.593/oz, both set for weekly declines alongside gold.

In the industrial metals segment, copper prices edged lower on Friday. London Metal Exchange copper dipped 0.2% to $9,567.30 per ton, and U.S. copper futures also lost 0.2% to $4.6695 per pound. Despite the dip, copper held onto weekly gains driven by optimism over China’s economic prospects.

Traders now look ahead to key Chinese economic indicators, including industrial production and retail sales data due Monday, followed by the People’s Bank of China’s loan prime rate decision on Tuesday, which could signal further stimulus measures.