Gold Price News: Gold Falls on Easing Trade War Fears

Gold prices gave up Thursday’s gains on Friday to cap a decisively bearish week for the precious metal, amid signs of a de-escalation of the US-China trade war.

Prices fell as low as $3,266 an ounce on Friday, down from around $3,360 an ounce in late trades on Thursday.

The losses for gold came as the metal lost some of its safe-haven appeal after signs that the US and China were discussing how to step back from the brink of an all-out trade war.

US and China seek to avert all-out trade freeze

US President Donald Trump on Thursday said the two powerhouse economies had held talks to resolve the potentially damaging trade war, providing a degree of relief in the financial markets. In a somewhat confusing situation, this prompted Chinese officials to deny there had been any economic or trade negotiations between the two countries. Nevertheless, news reports on Friday said China was considering exempting some US imports from its 125% tariffs on American goods.

Gold prices had rallied to an all-time high of just over $3,500 an ounce on April 22 due to fears that the tariffs stand-off could trigger a global recession, but more recent signs of a de-escalation between the US and China weighed on gold at the end of the week.

Even the imposition of President Trump’s baseline tariff of 10% marks a significant shift in the global rules-based trading system, making it likely that US trade policies will still impact economic growth even with a potential de-escalation in the works.

Upcoming data

Looking ahead this week, Tuesday will bring Euro Area economic sentiment figures for April, followed by the US JOLTs job openings figures for March, for an update on the US labour market. Economic figures from the US will be closely watched as the markets try to gauge the chances of interest rate cuts by the US Fed in the coming months. Recent figures from interest rate traders indicate a strong probability of no change to rates at the Fed’s meeting on May 7, but a roughly 63% chance of a cut of 25 basis points or more on June 18.