Markets are pricing in a 25-basis-point cut at the Federal Reserve’s October meeting and another in December
[BENGALURU] Gold prices fell more than 2 per cent on Friday (Oct 17) after hitting a record high above US$4,300 per ounce, pressured by a firmer US dollar and US President Donald Trump’s comment that a “full-scale” tariff on China would be unsustainable.
Spot gold was down 2.6 per cent at US$4,211.48 per ounce at 01.38 pm ET (1738 GMT), after scaling an all-time high of US$4,378.69 earlier in the session. The metal breached US$4,300/oz for the first time on Thursday, and is set for a weekly gain of about 4.8 per cent.
US gold futures for December delivery settled 2.1 per cent lower at US$4,213.30.
The US dollar index was up 0.1 per cent, making US dollar-priced bullion more expensive for overseas buyers.
Earlier in the session, gold had temporarily been on track for its biggest weekly gain since September 2008, when the collapse of Lehman Brothers fuelled the global financial crisis.
“I think Trump’s more conciliatory tone since the initial announcement of 100 per cent tariffs has taken a little heat out of the precious trade,” said Tai Wong, an independent metals trader.
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Trump on Friday confirmed a meeting with his Chinese counterpart, easing some market jitters over the escalating trade conflict between the two countries.
Gold, a traditional hedge against uncertainty, has surged more than 64 per cent this year, driven by geopolitical tensions, central bank buying, a switch out of the US dollar, and strong inflows into gold exchange-traded funds. Bets on US interest rate cuts have also supported the non-yielding asset.
“We are forecasting gold to average US$4,488 in 2026, and see further upside risk from broader structural factors supporting the market,” said Suki Cooper, global head, commodities research at Standard Chartered Bank.
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Markets are pricing in a 25-basis-point cut at the Federal Reserve’s October meeting and another in December.
HSBC raised its 2025 average gold price forecast by US$100 to US$3,455 per ounce, and projected it would reach US$5,000 an ounce in 2026.
Meanwhile, physical gold demand in Asia stayed firm even as prices hit fresh records, with Indian premiums at a decade-high ahead of festivals.
Spot silver fell 5.6 per cent to US$51.20 per ounce, after hitting a record high of US$54.47, tracking the rally in gold. The metal is set for a 2 per cent weekly gain.
Platinum fell 6.1 per cent to US$1,607.85 and palladium lost 7.9 per cent to US$1,485.50. REUTERS