Gold Surges Again as US-China Trade Hopes Resurface
Gold rises for a third straight week as investors weigh US-China trade talks, Fed signals, and global economic uncertainty.
Gold Surges Again as US-China Trade Hopes Resurface
Gold continues to glitter in the eyes of investors, rising for the third consecutive week as economic headwinds and renewed optimism over US-China trade negotiations reshape market sentiment. As policy signals from Washington shift and inflation concerns simmer, the precious metal’s allure remains resilient.
Gold Inches Higher, Fueled by Economic Uncertainty
Spot gold edged up 0.2% to $3,354.29 per ounce in early Friday trading, holding firm despite recent volatility. Earlier this week, prices briefly spiked to a record-breaking $3,500.05 before retracing on political developments. Meanwhile, U.S. gold futures climbed 0.5%, hitting $3,365.90—underscoring continued investor appetite for the metal amid rising global uncertainty.
This latest streak reflects not just market speculation, but deep-rooted concerns about the broader economic outlook.
“Gold isn’t just reacting to headlines—it’s reacting to the underlying fragility of the global economy,” explained Erin Chase, a senior analyst at Aurora Commodities. “It’s becoming a barometer of trust.”
Trump Softens Stance, Reignites Trade Optimism
Gold’s meteoric rise earlier in the week was largely driven by fears of instability in U.S. monetary policy. But those concerns cooled when President Trump appeared to ease off pressure against Federal Reserve Chair Jerome Powell and extended a more diplomatic hand toward China.
In a carefully worded statement, Trump acknowledged that trade talks with Beijing were back on track, pushing back against Chinese claims that negotiations had stalled. His pivot from confrontation to conversation helped calm investor nerves, nudging gold off its highs but keeping its upward trajectory intact.
Tariffs Remain a Barrier to Breakthrough
Despite the renewed dialogue, significant hurdles remain. Treasury Secretary Scott Bessent clarified that trade discussions can’t move forward meaningfully without a reduction in tariffs—though he noted that Washington won’t ease restrictions unilaterally.
That statement reinforced the current deadlock, suggesting that while both sides may be willing to talk, real progress could be slow. For investors, this means gold continues to serve as a financial safety net in the face of prolonged geopolitical tensions.
Federal Reserve Signals Patience, But Market Bets on Cuts
As the political climate evolves, all eyes remain on the Federal Reserve. Officials have indicated a preference to wait for clearer data before making policy moves, particularly in assessing how ongoing tariffs are impacting growth and inflation.
Yet traders are already anticipating future action. Current market pricing suggests expectations for nearly 84 basis points in rate cuts by the end of 2025. Should those cuts materialize, they would likely further bolster gold’s appeal. Lower interest rates generally weaken the dollar and enhance demand for non-yielding assets like gold.
Precious Metals Show Mixed Signals
The positive momentum wasn’t exclusive to gold. Silver also gained 0.2%, reaching $33.65 an ounce, while platinum ticked up to $973.03. Palladium, however, dipped by 1% to $944.25, reflecting divergent trends across the precious metals sector amid broader market unpredictability.
Upcoming Economic Data May Shift the Narrative
Investors now await fresh data to gauge the direction of the global economy. UK retail sales, French manufacturing sentiment, and the University of Michigan’s consumer sentiment index are among the key indicators that could influence market movements in the coming days.
How central banks and policymakers respond to this data will likely determine whether gold continues its upward climb or pauses for breath.
Gold Remains a Beacon in Choppy Economic Waters
In a climate where headlines shift by the hour and investor confidence is on edge, gold has proven its staying power. The ongoing tug-of-war between geopolitical developments and monetary policy keeps demand strong for this traditional safe haven.
As the U.S. and China tiptoe toward potential trade resolution—and with the Federal Reserve playing it cool—investors are hedging their bets. Gold may not offer certainty, but in times like these, it offers something just as valuable: stability.
Disclaimer:
This article is for informational purposes only and should not be interpreted as financial advice. Always consult a qualified financial advisor before making investment decisions. The views expressed are based on current market trends and may change with evolving global developments.
source : The Economic Times