Gold Prices Surge on Bargain Hunting

Gold prices experienced a significant increase of over 1% on Thursday, driven by investors capitalizing on lower prices after a one-week low. This dip had been prompted by optimism surrounding potential progress in U.S.-China trade relations.

Spot gold saw a rise of 1.1%, reaching $3,323.21 per ounce as of 0634 GMT. Simultaneously, U.S. gold futures also climbed by 1.1% to $3,330.20.

Traditionally viewed as a safe-haven asset during times of global uncertainty, gold reached a record peak of $3,500.05 on Tuesday. However, it subsequently declined below the $3,300 mark on Wednesday.

Analyst Insights

Kyle Rodda, a financial market analyst at Capital.com, commented on the market dynamics: “The volatility observed this week is influenced by technical factors and headline-driven risks. However, the underlying fundamentals remain robust, leading investors to buy on dips based on a broader perspective.”

US-China Trade Relations

U.S. Treasury Secretary Scott Bessent stated on Wednesday that the current high tariff levels between the U.S. and China are unsustainable. He emphasized the need for reduction before meaningful trade negotiations can advance, while also noting that President Donald Trump is unlikely to unilaterally reduce tariffs on Chinese imports.

Furthermore, a report indicated that President Trump intends to shield car manufacturers from certain tariffs, following intense lobbying efforts by industry executives in recent weeks.

Rodda added, “We anticipate a continued uptrend unless the Trump administration significantly alters its trade policies.”

The International Monetary Fund (IMF) cautioned on Wednesday that these tariffs are expected to hinder global economic growth and increase debt levels worldwide.

Additional Factors Affecting Gold Prices

A decline of 0.2% in the dollar index against other currencies made dollar-denominated gold more affordable for international buyers.

In other precious metals trading, spot silver decreased by 0.8% to $33.29 per ounce, platinum fell by 0.1% to $972.26, and palladium remained stable at $943.20.