Gold prices in the US dropped to $3,306.50 after reaching record highs this week, pressured by easing US-China trade tensions and a stronger US dollar.

Gold prices in the United States fell sharply on Friday, giving up earlier gains after optimism over easing trade tensions between the US and China boosted investor sentiment. The precious metal, often considered a safe-haven asset, dropped over 1% during the session and is on track for a weekly loss following a series of record highs earlier this week.

Gold Prices Fall as US-China Trade Tensions Ease

US Spot Gold and Futures Decline

By late Friday morning (1136 GMT), spot gold prices were down 1.5% at $3,296.19 per ounce, according to a Reuters report. Meanwhile, US gold futures slipped 1.3%, settling around $3,306.50. This decline comes after gold touched an all-time high of $3,500.05 earlier in the week, fueled by global economic concerns.

China’s Tariff Exemptions Boost Optimism

The major driver behind gold’s decline was fresh optimism surrounding the US-China trade relationship. Reports indicated that China began exempting certain American goods from its steep 125% tariffs, suggesting a possible thaw in trade tensions. Although an official announcement is still pending, several companies have reportedly been asked to identify critical goods eligible for tariff exemptions.

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Strengthening US Dollar Pressures Gold

Additionally, the US dollar gained strength on the back of improved trade sentiment, making gold more expensive for foreign buyers and further pressuring prices. Analysts, including Zain Vawda of MarketPulse by OANDA, noted that the growing possibility of a US-China trade deal could pull gold prices even lower, possibly toward the $3,000 mark or below.

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Conclusion:

Gold prices are experiencing a pullback after an impressive rally earlier this year, driven largely by investor demand for safe-haven assets amid global uncertainty. However, renewed optimism over a US-China trade agreement and a stronger dollar are now shifting market dynamics, setting the stage for a potential correction in gold’s meteoric rise.

End Point:

Investors will closely monitor upcoming US economic data and developments in trade talks to gauge gold’s next move, with further clarity expected in the coming weeks.

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