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Gold price drifts lower as US-China trade deal hopes undermine safe-haven assets
Friday, 25 April 2025 12:49 WIB | GOLD |GOLD

Gold price (XAU/USD) attracts some sellers following an uptick to the $3,370-3,371 area during the Asian session on Friday and reverses a part of the previous day's positive move. Hopes for a potential de-escalation of trade war between the US and China remain supportive of a positive risk tone, which, in turn, is seen undermining the safe-haven precious metal. Apart from this, the emergence of some US Dollar (USD) buying turns out to be another factor exerting downward pressure on the commodity.

Meanwhile, Federal Reserve (Fed) officials showed willingness for potential interest rate cuts, which might cap the USD upside and act as a tailwind for the non-yielding Gold price. Furthermore, persistent geopolitical uncertainties might further contribute to limiting the downside for the XAU/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for the resumption of this week's corrective pullback from the $3,500 psychological mark, or the all-time peak.

Investors remain hopeful over the potential de-escalation of the US-China trade war, which acts as a headwind for the safe-haven Gold price during the Asian session on Friday. In fact, US President Donald Trump said on Thursday that trade talks between the US and China are underway.
Moreover, China is reportedly mulling to suspend its 125% tariff on some US imports. This further points to signs of easing trade tensions between the world's two largest economies and boosts investors' confidence, contributing to driving flows away from the precious metal.
The US Dollar draws some support from mostly upbeat US macro data released on Thursday. In fact, the US Department of Labor reported that Initial Jobless Claims increased modestly to 222,000 for the week ending 19 April and pointed to continued labor market resilience.
The US Census Bureau reported that Durable Goods Orders surged 9.2% in March, beating the 2% forecast and marking a third consecutive rise. Transportation equipment also rose for a third month, surging 27%.

Source: fxstreet

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