Gold prices have recently experienced a significant decline, marking the end of a nine-week rally. On Friday, gold fell by more than 1%, as investors began to take profits amid easing trade tensions between the U.S. and China.
Gold Prices Decline Amid Profit-Taking
As of Friday, spot gold was trading at $4,063.46 per ounce, down 1.5%. This decline brought gold’s overall weekly loss to 4.3%, the largest percentage drop since November 2024. U.S. gold futures for December delivery also saw a decrease, falling 1.7% to $4,077.10 per ounce.
Market Reactions and Economic Data
- Year-to-Date Performance: Gold has gained 55% in 2024, primarily due to geopolitical instability and expectations of U.S. interest rate cuts.
- Record High: Earlier in the week, gold reached a record high of $4,181.21, surpassing $4,000 per ounce for the first time this month.
- Influence of Trade Tensions: Analysts suggest that recent rallies were too rapid, with expectations of improved U.S.-China relations contributing to the decline.
Carlo Alberto De Casa, an external analyst at Swissquote, noted that investors are either taking profits or reducing their exposure to gold due to relieving trade worries. The upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping is expected to further ease concerns.
Upcoming Economic Reports
Traders are also closely monitoring the U.S. Consumer Price Index report set to be released, which is anticipated to show strong consumer price growth. Markets expect the Federal Reserve to cut interest rates by 25 basis points in its next meeting, a move that would typically be favorable for gold.
Market Overview
- Dollar Strength: The dollar index rose 0.6% for the week, making gold more expensive for international buyers.
- Silver Prices: Similarly, spot silver dropped by 1.6% to $48.13 per ounce, marking a weekly decline of 7.2%.
- Other Metals: Platinum and palladium also faced losses, with platinum down 1.1% to $1,610.59 and palladium falling 3.8% to $1,401.18.
Despite these short-term corrections, analysts remain optimistic about gold’s long-term trajectory. Russell Shor, a senior market analyst at Tradu, emphasized the strong fundamentals supporting gold’s upward trend.
