GOLD prices dropped more than two per cent yesterday and were heading for their worst week in six months, as an overall higher dollar and a temporary US-China trade agreement dented demand for the safe-haven metal among investors.
Spot gold was down 1.9pc to $3,178.06 an ounce. Bullion has lost more than 4pc so far this week and is set for its worst weekly performance since November 2024.
US gold futures fell 1.4pc to $3,180.90.
“We’ve gone through a week where there have been optimistic signals in terms of trade negotiations and we have seen the dollar appreciate on the course, which is weighing on gold prices,” said Nitesh Shah, commodities strategist at WisdomTree.
Earlier this week, the US and China agreed to temporarily slash the harsh tit-for-tat tariffs imposed in April, lifting sentiment in the wider financial markets.
The dollar index was subdued on the day, but was heading for its fourth straight weekly gain, making gold less attractive for other currency holders.
Gold, used as a safe store of value during times of political and financial uncertainty, scaled an all-time high of $3,500.05 per ounce last month, boosted by central bank buying, tariff war fears and strong investment demand.
Offering some respite to gold, signs of slowing inflation and weaker-than-expected economic data in the United States this week cemented bets of more Federal Reserve rate cuts this year.
Non-yielding gold tends to thrive in a low-rate environment.
“On the plus side, gold price dips continue to attract buyers, which shows that the precious metal remains a favoured asset, with the global growth and inflation outlooks still looking rather murky,” said Tim Waterer, chief market analyst at KCM Trade.
Elsewhere, spot silver dipped 1.8pc to $32.08 an ounce, platinum eased 0.5pc to $985.1 and palladium lost 1pc to $958.24.
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