Gold prices continued to decline in Asian markets on Thursday, extending losses from earlier in the week as renewed optimism from a U.S.-Japan trade agreement and strong technology sector earnings encouraged investors to take on more risk, reducing the appeal of traditional safe havens like gold.
After climbing to over a one-month high earlier this week, gold gave back most of its gains on Wednesday and Thursday amid improving market sentiment. Spot gold dropped 0.3% to $3,378.93 per ounce, while gold futures slipped 0.4% to $3,384.60 per ounce by 01:50 ET (05:50 GMT).
Despite this pullback, gold has remained mostly confined within a $200 trading range throughout 2025, struggling to regain the record levels above $3,500 per ounce reached in April. However, demand for the precious metal remains relatively steady, supported by ongoing uncertainties in the U.S. economy.
Risk Appetite Rises on Trade Deal and AI Optimism, Weighing on Precious Metals
The surge in investor confidence, sparked largely by the newly announced trade deal between the U.S. and Japan, has pressured prices across gold and other precious metals. Under the agreement, Japanese exports will face a 15% U.S. tariff—a notable reduction from the 25% initially proposed by the Trump administration.
This breakthrough has heightened expectations that Washington may finalize additional trade agreements before the August 1 deadline for imposing higher tariffs on several major economies. Reports also indicate that the European Union is considering a similar 15% tariff trade pact, with India’s deal reportedly close to completion.
Spot platinum fell 0.4% to $1,416.99 per ounce, and silver dropped 0.6% to $39.06 per ounce, both retreating from earlier weekly gains.
Investor confidence also received a boost from strong earnings reports in the tech sector. Alphabet (NASDAQ: GOOGL), Google’s parent company, exceeded expectations in its Q2 results, driven by growing demand for artificial intelligence (AI) technologies.
AI optimism was further fueled by President Trump’s signing of three executive orders on Wednesday aimed at accelerating the industry’s growth in the U.S. Combined with trade deal optimism, this helped push Wall Street to record highs on Wednesday.
Industrial metals also gained momentum amid improved risk sentiment. On the London Metal Exchange, benchmark copper futures rose 0.1% to $9,942.75 per ton, while COMEX copper futures increased 0.7% to $5.88 per pound, both holding onto solid weekly gains.
China’s Gold Purchases Decline More Slowly Amid Safe Haven Demand
China’s gold consumption dipped 3.5% year-on-year in the first half of 2025, a slower decline compared to the 5.6% drop recorded during the same period last year, according to data from China’s state-backed Gold Association.
The reduced demand was primarily driven by weaker jewelry sales, as higher bullion prices deterred some consumers. However, this was partially offset by strong institutional buying, as ongoing trade tensions and economic uncertainties prompted investors to increase bullion purchases.
China remains one of the world’s largest gold consumers, with the People’s Bank of China also reportedly increasing its gold reserves in recent months.
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