Gold pulls back after record high on firm dollar, Trump’s China remarks.
Gold prices fell more than 2% on Friday after hitting a record high above US$4,300 per ounce, pressured by a firmer dollar and US President Donald Trump’s comment that a “full-scale” tariff on China would be unsustainable.
Spot gold was down 2.2% to US$4,228.89 per ounce at 10.21am ET (1421 GMT), after scaling an all-time high of US$4,378.69 earlier in the session. The metal breached US$4,300/oz for the first time Thursday, and is set for a weekly gain of 5.2%.
US gold futures GCcv1 for December delivery were down 1.5% to US$4,239.30.
The dollar index was up 0.2%, making dollar-priced bullion more expensive for overseas buyers.
Earlier in the session, gold had temporarily been on track for its biggest gain since September 2008 when the collapse of Lehman Brothers fuelled the global financial crisis.
“I think Trump’s more conciliatory tone since the initial announcement of 100% tariffs has taken a little heat out of the precious trade,” said Tai Wong, an independent metals trader.
Trump on Friday confirmed a meeting with his Chinese counterpart, easing some market jitters over the escalating trade conflict between the two countries. Wall Street’s main indexes were mixed at open on Friday after the comments, while worries over regional bank credit issues kept investors on edge.
Gold, a traditional hedge against uncertainty, has surged more than 62% this year, driven by geopolitical tensions, central bank buying, a switch out of the dollar, and strong inflows into gold exchange-traded funds. Bets on US interest rate cuts have also supported the non-yielding asset.
“We’re forecasting gold to average US$4,488 in 2026, and see further upside risk from broader structural factors supporting the market,” said Suki Cooper, global head, commodities research at Standard Chartered Bank.
Markets are pricing in a 25 basis point cut at the Federal Reserve’s October meeting and another in December.
HSBCon Friday raised its 2025 average gold price forecast by US$100 to US$3,455 per ounce, and projected it would reach US$5,000 an ounce in 2026.
Spot silver fell 4.1% to US$51.99 per ounce, after hitting a record high of US$54.47, tracking the rally in gold. The metal is set for a 7.4% weekly gain.
Source: Theedgemalaysia
