Gold prices fell more than 1.5% on Friday, settling at $3,299.69 per ounce and moving toward a weekly decline as signs surfaced that tensions in the US-China trade dispute may be easing.
Reports that China could exempt certain US goods from tariffs boosted market sentiment, strengthening the dollar and helping European stocks rise.
Analyst Zain Vawda warned that a formal US‑China trade agreement could push gold significantly lower, possibly toward $3,000 an ounce or below. Even with the recent pullback, gold has risen roughly 26% year‑to‑date and earlier in the week reached an intraday record high of $3,500.05.
At the same time, Federal Reserve officials signaled they do not see an urgent need to change monetary policy while they evaluate the economic effects of the trade measures. Their measured stance contributed to reduced safe‑haven demand for gold as investors reassess risks and returns across asset classes.
Market participants are balancing several forces: easing trade tensions that favor risk assets and a firmer dollar that typically weighs on bullion, against ongoing geopolitical and macroeconomic uncertainties that continue to underpin some investor interest in gold as a hedge.
Traders will watch further developments in US‑China negotiations, any official tariff exemptions, and comments from central bankers for clues on near‑term price direction. Technical factors and ongoing inflows into exchange‑traded products remain relevant, but a durable move lower in gold prices would likely require clear progress on trade talks or a decisive shift in monetary policy expectations.