Gold Heads for Second Weekly Decline as Fed Caution and Trade Optimism Dull Safe-Haven Demand

Gold prices slipped during Asian trading on Friday, on track for a second straight weekly loss, as the Federal Reserve’s cautious outlook on future rate cuts and signs of improving U.S.-China trade relations reduced investor appetite for the precious metal.

Spot gold fell 0.4% to $4,008.65 an ounce by 01:49 ET (05:49 GMT), giving back part of Thursday’s sharp gains, while U.S. gold futures inched up 0.1% to $4,019.90. Despite a more than 2% surge in the previous session, bullion was still set to end the week down 2.6%.

Fed’s cautious tone and U.S.-China trade progress weigh on gold

The Federal Reserve lowered its benchmark interest rate by 25 basis points on Wednesday to a range of 3.75%-4.00%. However, Chair Jerome Powell noted that another cut in December was “far from a foregone conclusion.”

His remarks lifted U.S. Treasury yields and the dollar, both of which typically pressure gold prices since the metal pays no interest.

Risk appetite also improved following comments from U.S. President Donald Trump, who said trade talks with China had made “amazing” progress and that a deal could come “pretty soon.”

The two leaders met in South Korea on Thursday, where they agreed to cut a 10% tariff on fentanyl-linked imports. In turn, China resumed purchases of U.S. soybeans and paused new restrictions on rare-earth exports.

The thaw in trade tensions removed one of the main drivers of safe-haven demand, prompting investors to rotate back into risk assets on hopes of a potential deal.

Even so, analysts noted that central bank buying and ongoing global uncertainty could provide a floor for gold prices, despite weak short-term momentum.

Metals trade steady as markets eye weak Chinese data

Other precious and industrial metals traded within narrow ranges on Friday. Silver futures slipped 0.3% to $48.48 per ounce, while platinum futures rose 0.4% to $1,617.45.

On the London Metal Exchange, benchmark copper futures fell 0.4% to $10,866.20 per ton, and U.S. copper futures were down 0.6% to $5.07 per pound.

Fresh data from China showed manufacturing activity contracted for the seventh consecutive month in October, underscoring persistent weakness in the world’s second-largest economy. The figures have fueled speculation that Beijing could soon roll out additional policy support to stabilize growth.