Gold posts worst weekly performance in 6 months after trade tensions ease

Gold prices settled down more than 2% in trading on Friday, posting their worst weekly performance since November, as the market was affected by increased risk appetite following the US-China trade agreement, reducing its safe-haven appeal.

Spot gold fell 1.7% to $3,185.87 per ounce. Gold has fallen 4.2% since the beginning of the week. Prices reached a record high of $3,500.05 last month amid escalating tariff tensions.

U.S. gold futures fell 0.70% to $3,203.70. “The de-escalation of the US-China trade war has renewed risk appetite in the broader market,” said Jim Wyckoff, senior analyst at Kitco Metals. “This shift is spurring profit-taking among futures traders, particularly in the gold market, and has led to a week-long liquidation of assets.”

This week, Washington and Beijing announced a 90-day suspension of mutual tariffs while they work out details for ending their trade war. Later, the US announced a reduction in the “minimal tariff” on small shipments from China.

As a result, Wall Street’s three major indexes opened higher today, building on gains this week after a prolonged period of uncertainty.

Gold is a hedge against economic and geopolitical turmoil and thrives on lower interest rates.

Meanwhile, the latest data on slowing inflation, along with weaker-than-expected US economic data, has bolstered bets on further interest rate cuts by the Federal Reserve this year.

Markets expect the US central bank to cut borrowing costs twice, starting in September. Among other precious metals, spot silver fell 1.3% to $32.27 per ounce, declining more than 1% for the week. Platinum fell 0.6% to $983.56, and palladium fell 0.3% to $965.46. Both metals are heading for weekly losses.