Gold prices fell more than 2% after scaling another record on Friday, as investors pulled away from the safe-haven metal following US President Donald Trump’s comments that eased concerns of an escalating trade war with China.
Spot gold dropped as much as 2.2% to a daily low of $4,220.10 per ounce, erasing most of its gains over the past two days. Earlier, it had notched another all-time high of $4,378.69 per ounce.
US gold futures also plunged from a high of $4,392 per ounce, now trading at about $4,236.20 an ounce for an intraday loss of 1.6%.
Prior to the decline, bullion had been on pace for its biggest weekly gain since September 2008, when the collapse of Lehman Brothers fueled the global financial crisis. Still, in what was a tumultuous week for the markets, the metal remains up 8%, outperforming most other asset classes.
Earlier in the morning, Wall Street investors had been in panic mode over credit concerns that sparked a big sell-off in regional banks in the previous session, sending gold higher. US equities opened Friday’s session deep in the red, but later pared some losses after Trump eased concerns on the trade front by confirming that talks with China remain on.
“Equity indices have bounced off their lows on the back of a couple of bullish-looking comments from Donald Trump… we’ve seen gold prices come down a little bit on the back of those comments,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
Bullion has surged over 66% this year, driven by geopolitical tensions, rate cut bets, central bank buying, de-dollarization and robust exchange-traded-fund inflows.
“I believe resilient and huge ETF flows are pulling prices up,” said Michael Haigh, global head of commodities research at Société Générale. The bank recently said that it expects gold to climb to as high as $5,000 by the end of next year.
In addition to trade uncertainty, expectations of US interest rate cuts are also fueling gold’s rally in recent weeks. Investors currently expect a 25-basis-point reduction at the Fed’s October 29-30 meeting and another in December.
Earlier, HSBC analysts raised their 2025 average gold price forecast by $100 to $3,455 per ounce, and projected gold to reach $5,000 an ounce in 2026, supported by elevated risks.
Gold price pulls back from record as Trump eases trade concerns