Gold price drops, heading for the worst week in six-months on easing trade tensions

Gold prices fell more than 2% Friday, and are heading towards their worst six-month period in recent memory. An overall stronger dollar and an interim U.S. China trade agreements have weakened investor demand for this safe-haven. Spot gold was down by 1.9% at $3,178.06 per ounce. Bullion is down more than 4% this week, and it’s on track to have its worst performance weekly since November 2024. U.S. Gold Futures dropped 1.4% to $3.180.90.

The U.S., China and other countries agreed earlier this week to temporarily reduce the high tariffs that were imposed in April. This agreement lifted the mood of the financial markets. Gold is less appealing to other currency holders because the dollar index has been subdued for the day but is on track for its fourth consecutive weekly gain.

Last month, gold, which is often used to store value in times of financial and political uncertainty, reached a record high of $3.500.05 per ounce, thanks to central bank purchases, fears of tariff wars, and strong demand for investment. This week, the United States economic data and signs of a slowing inflation along with weaker than expected economic data have cemented the bets that more Federal Reserve rate reductions will occur this year.  Gold that does not yield tends to flourish in an environment with low rates.