Gold Prices Dip After Strong Rally
Gold prices fell sharply on Friday, signaling the end of a nine-week winning streak. Investors booked profits following a record-breaking run, while improving trade sentiment between the United States and China reduced the metal’s safe-haven appeal.
At 11:05 GMT, spot gold was down 1.9% to $4,047.30 per ounce, marking a weekly decline of 4.8%, its steepest fall since November 2024. U.S. gold futures for December delivery also dropped 2% to $4,061.30 per ounce.
Profit-Taking After Record Highs
Gold surged to a record $4,181.21 per ounce earlier this week after crossing the $4,000 mark for the first time this month. Analysts say the recent correction was expected.
“The rally of the last few weeks has been too quick, and investors are betting that easing trade tensions between the U.S. and China could slow demand,” said Carlo Alberto De Casa, analyst at Swissquote Bank.
He added that many investors who earned significant returns are now taking profits or reducing exposure to gold.
U.S.-China Meeting Eases Tension
Investor sentiment improved after the White House confirmed that President Donald Trump will meet Chinese President Xi Jinping next week during his Asia visit. The news helped ease concerns about rising trade disputes between the two economic giants.
This development has shifted risk appetite, with traders moving away from gold toward riskier assets.
Focus Turns to U.S. Inflation Report
All eyes are now on the upcoming U.S. consumer price index (CPI) report, due later today. Economists expect the data to show steady inflation growth for September.
Markets are still pricing in a 25-basis-point rate cut by the Federal Reserve next week.
Lower interest rates typically support gold by reducing the opportunity cost of holding non-yielding bullion.
Analysts See Gold’s Long-Term Strength
Despite the pullback, market experts believe that gold’s broader uptrend remains intact.
“Even if short-term corrections emerge, the broader trend for gold remains firmly upward, supported by strong fundamentals,” said Russell Shor, senior market analyst at Tradu.
The yellow metal has gained 55% so far in 2025, driven by geopolitical tensions, central bank buying, and expectations of Fed rate cuts.
Dollar Strength Adds Pressure
The U.S. dollar index gained 0.6% this week, making gold more expensive for holders of other currencies. A stronger dollar often weighs on precious metals by reducing foreign investor demand.
Other Precious Metals Also Weaken
Gold wasn’t the only metal to fall.
- Spot silver declined 2.2% to $47.83 per ounce, heading for its worst week since March, down 7.4%.
- Platinum slipped 2.6% to $1,581.30.
- Palladium dropped 4.1% to $1,397.50.
Outlook: Short-Term Correction, Long-Term Strength
Experts expect volatility to continue in the short term as traders react to global economic signals and central bank decisions. However, most analysts agree that gold remains a strong long-term investment due to continued geopolitical uncertainty and interest rate expectations.
If inflation remains under control and trade tensions ease further, gold may stabilize near current levels before resuming its upward path.