Gold prices fell to a two-week low Thursday on signs that global trade tensions ignited by US President Donald Trump may be easing, suppressing demand for the safe-haven metal.
Spot gold was down 2.0% to $3,221.94 per ounce as of 10:30 a.m. ET, after touching its lowest since April 14 earlier. Three-month gold futures saw a bigger drop of 2.7% to $3,230.10 an ounce in New York.
Gold has now pulled back sharply from the $3,500-an-ounce milestone reached a week ago, coinciding with improved market sentiment after the Trump administration hinted it is closing in on the first tranche of trade deals, as confirmed by US Trade Representative Jamieson Greer on Wednesday.
On the same day, US President Trump聽said he has potential deals lined up with India, Japan and South Korea. There also is a 鈥渧ery good chance鈥� of securing a deal with China, he added.
鈥淭here鈥檚 hints of upcoming trade deals, and talk from China that the Trump administration had reached out. A risk-on trade is going on, leading to some profit-taking in gold鈥檚 safe-haven,鈥� said Bob Haberkorn, senior market strategist at RJO Futures.
Despite the profit-taking, bullion remains one of the best-performing assets this year, recording a gain of 23% in 2025 while setting multiple record highs along the way.
Bullish sentiment
Analysts remain bullish on the yellow metal due to its reputation as a haven asset, as Trump鈥檚 fast-evolving trade policy continues to cast doubt on the global economy.
The latest quarterly poll by Reuters is forecasting gold prices to average above $3,000 annually for the first time, supported by global trade frictions聽and a swing away from the US dollar.
Last week, JPMorgan said it expects gold to average $3,675 in the fourth quarter, on its way to reaching $4,000 an ounce by the middle of next year on rising probability of a recession.
Data on Wednesday showed that the US economy聽contracted聽in the first quarter at the start of the year for the聽first time since 2022聽due to a monumental pre-tariffs import surge. That saw traders boost wagers on four quarter-point rate cuts by the Federal Reserve this year to help prevent a recession, adding support to gold.
鈥淲hile the short-term correction has been driven by improved market sentiment, the structural drivers underpinning gold鈥檚 strength remain firmly in place,鈥� Ole Hansen, head of commodity strategy at Saxo Bank, wrote.
(With files from Bloomberg and Reuters)