Gold nosedives as Fed and trade truce rattle nerves
Gold prices hovered near $4,000 per ounce on Friday as investors assessed a temporary agreement between Washington and Beijing that left underlying economic tensions unresolved. The precious metal dropped as much as 0.8 percent after gaining 2.4 percent during the prior trading session, snapping a four-session decline.
President Donald Trump and Chinese leader Xi Jinping appeared to ease months of escalating friction through talks that produced a one-year pause in hostilities. Xi emphasized the need for reliable supply chains in his initial public comments following their meeting. Analysts suggest the truce primarily buys both nations time to reduce mutual dependencies while stabilizing their relationship. The agreement also highlighted China’s growing economic strength since Trump’s earlier presidency, a development spurring demand for protective assets.
Bullion remains on track for its second consecutive weekly loss and has retreated roughly 9 percent from its Oct. 20 record above $4,380. Federal Reserve Chair Jerome Powell dampened speculation about additional rate reductions in December after the central bank’s quarter-point cut on Wednesday. Gold-backed exchange-traded funds have experienced their longest withdrawal streak since April. Despite recent weakness, the metal has surged more than 50 percent this year, supported by central bank purchases and investor portfolio protection strategies.
