Gold prices recorded major declines on Thursday as the U.S. dollar rose and trade tensions eased, impacting the metal’s safe-haven appeal. Investor focus is on the U.S. economic growth data and the U.S. non-farm payrolls report, which is due this week.
In Dubai, gold rates marked notable losses, with 24-carat gold declining AED7 to AED391.5 and 22-carat gold falling AED6.75 to AED362.25. Additionally, 21-carat gold dipped AED6.5 to AED347.5, while 18-carat gold lost AED5.5 to AED297.75.
Globally, spot gold dipped 2.41 percent to $3,228.56, as of 4:09 GMT, while U.S. gold futures declined 2.54 percent to $3,234.72. Non-yielding gold, traditionally seen as a hedge against economic and political uncertainty, hit a record high of $3,500.05 last week. Despite the latest decline, gold gained close to 6 percent in the last month.
The U.S. dollar index rose 0.36 against its peers, making bullion less attractive for other currency holders.
Trump signals potential trade deals with India, South Korea and Japan
U.S. President Donald Trump said he has “potential” trade deals with India, South Korea and Japan as he sought to convert his tariff policy into trade agreements. Trump was asked when he would be announcing agreements with those three countries. “We have potential deals” with them, he said.
Trump added that he was in no rush to conclude the deals because the United States is reaping the benefits of the tariffs he has imposed. “I’m in less of a hurry than you are. We are sitting on the catbird seat. They want us. We don’t need them,” he said.
Gold demand grows despite record prices
Gold prices scaled multiple record highs in April amid rising uncertainty as Trump’s tariffs shook markets globally. The World Gold Council’s latest report revealed that gold demand rose 1 percent to 1,206 tons during the first quarter of 2025 despite a record high price environment in which gold surpassed $3,000/oz.
“It’s been a bumpy start to the year for global markets as trade turmoil, unpredictable U.S. policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors. In this context, investment demand for gold has paved the way for the highest level of first-quarter demand since 2016,” stated Louise Street, senior markets analyst at the World Gold Council.
The report added that central banks are now entering their 16th consecutive year of net-buying, adding 244 tons to global reserves in Q1 amidst ongoing global uncertainty. While this level of demand was 21 percent lower year-on-year, it remains robust and in line with the quarterly average for the last three years of sustained, strong buying.
U.S. economy contracts for first time in three years
The U.S. economy contracted for the first time in three years in the first quarter of fiscal 2025, as businesses rushed to import goods ahead of Trump’s expected tariffs. The Bureau of Economic Analysis said the U.S. economy contracted at an annualized rate of 0.3 percent during the first quarter of 2025 after growing at a solid pace of 2.4 percent in the previous quarter. The data revived concerns about a looming U.S. recession.
Traders expected the Federal Reserve to resume cutting rates by June as signs of an economic slowdown emerge. Traders not expect the Fed to cut rates by a full percentage point by the end of 2025. The market is now awaiting the release of the non-farm payrolls report on Friday for more insights into the Fed’s policy path.
“Looking ahead, the broader economic landscape remains difficult to predict, and that uncertainty could provide upside potential for gold. As turbulent times persist, safe haven demand for gold from institutions, individuals and the official sector could climb higher in the months to come,” added Street.
Read: Gold demand grows in Q1 2025 amid record high prices, gold ETF revival
Other precious metals
In line with the decline in gold prices, the precious metals market was in the red on Thursday. Spot silver fell 1.79 percent to $32.01, platinum dipped 0.93 percent to $957.75 and palladium declined 0.16 percent to $936.36.
