Gold prices posted modest gains on Thursday as investors focused on developments from the meeting between Donald Trump and Xi Jinping, while persistent concerns over energy-driven inflation continued to shape sentiment across precious metals markets.
Spot gold climbed 0.3% to $4,700.25 per ounce by 02:56 ET (06:56 GMT), recovering slightly after declines in the previous two sessions. U.S. gold futures, however, slipped 0.2% to $4,697.97.
Markets Await Clarity From Trump-Xi Discussions
Investors remained cautious as the first phase of the two-day summit between Trump and Xi got underway.
During the meeting, Xi Jinping said China and the United States had achieved “positive progress” in recent trade talks and stressed that cooperation between both nations would help support global stability.
Donald Trump praised Xi as a great leader and said ties between Washington and Beijing would become “better than ever before.”
Financial markets are closely watching for signs that the discussions could help reduce geopolitical tensions that have unsettled commodity and foreign exchange markets in recent weeks.
Gold, which is often viewed as a defensive asset during periods of political and economic uncertainty, continued to draw support from concerns surrounding the Middle East conflict and disruptions affecting the Strait of Hormuz, one of the world’s most important oil shipping routes.
Strong U.S. Inflation Data Caps Bullion Gains
Despite support from geopolitical uncertainty, gains in gold remained limited as stronger-than-expected U.S. inflation readings and a firmer dollar weighed on bullion prices.
Producer prices in the United States accelerated in April at the fastest annual pace since 2022, while consumer inflation also came in above expectations as rising energy prices linked to the Iran conflict filtered into the wider economy.
The latest inflation figures reinforced expectations that the Federal Reserve could maintain higher interest rates for an extended period, reducing demand for non-interest-bearing assets such as gold.
The U.S. Dollar Index hovered near its highest level in two weeks following the inflation data, creating additional pressure on bullion by making gold more expensive for overseas buyers.
Oil prices remaining above $100 per barrel also continued to concern investors, amid fears that prolonged supply disruptions in the Gulf region could intensify global inflationary pressures.
India Increases Duties on Precious Metal Imports
Traders were also assessing India’s decision to raise import duties on gold and silver to 15% from 6%, as authorities attempt to curb overseas purchases of precious metals and protect the country’s foreign exchange reserves.
The higher tariffs may weaken physical demand in one of the world’s largest bullion markets.
“India meets most of its gold demand through imports, with gold and silver accounting for nearly 11% of total imports. The tariff hike is likely to be a near-term headwind for physical gold demand in India, potentially tempering local buying and weighing on import flows,” analysts at ING Group said in a research note.
Copper Pulls Back While Remaining Near Historic Highs
Elsewhere in metals trading, silver fell 0.6% to $87.01 per ounce, while platinum declined 0.4% to $2,128.60 per ounce.
Copper prices also retreated, although they continued to trade close to record territory. Benchmark copper futures on the London Metal Exchange dropped 1.3% to $13,953.33 per tonne, while U.S. copper futures lost 0.5% to $6.58 per pound.
LME copper had earlier climbed to $14,191.48 per tonne during Wednesday’s trading session, remaining close to the all-time high of $14,531.70 per tonne reached in late January.
“The move above $14,000/t highlights just how tight the copper market has become. Low inventories outside the US and ongoing disruptions across key producing regions leave prices increasingly sensitive to any incremental demand growth,” ING analysts added.
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