Gold Rises as Traders Weigh Trump Comments on China Trade Deal

One kilogram and five hundred gram gold bars. Photographer: Chris Ratcliffe/Bloomberg

(Bloomberg) -- Gold jumped after a run of losses as traders digested comments from President Donald Trump following his closely watched meeting with Chinese leader Xi Jinping, which produced a trade deal that may stop short of a sweeping agreement.

Bullion rose as much as 1.3% to near $3,982 an ounce, after falling almost 5% over the previous four sessions. Trump said he had an “amazing meeting” with Xi and would immediately halve fentanyl tariffs to 10% in a deal that will see China restart soybean imports and pause rare-earths licensing for a year. Despite speculation that Trump might make additional concessions — including the US opening access to Nvidia Corp.’s most advanced Blackwell line — the president indicated that it had not been part of the discussions.

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The outcome is poised to resolve — at least for now — months of trade brinkmanship in which the world’s two largest economies have threatened a series of levies and export controls on their products. Still, it’s likely to fall short of a comprehensive agreement that addresses issues at the heart of the US-China economic competition.

“This looks like an early attempt to reset the US–China narrative by re-engaging selective trade channels to restore confidence,” said Saxo Capital Markets Pte strategist Charu Chanana. “Gold is, however, still sniffing out uncertainty — pricing a soft easing bias from the Fed and lingering geopolitical risk.”

Traders were also weighing conflicting views from Federal Reserve policymakers, with Chair Jerome Powell on Wednesday downplaying the likelihood of a December reduction after a the central bank delivered a widely expected quarter-point cut. Despite Powell’s unusually direct remarks, the vote marked the third straight meeting in which officials lodged dissents against the majority decision — a run not seen since 2019.

The divisions at the Fed add to challenges for investors seeking signals on the path ahead for monetary policy, with the US government shutdown that began in early October creating a vacuum of official data. Higher interest-rates tend to pose a headwind for non-yielding gold.

The precious metal has retreated sharply following a scorching rally that drove prices to a record above $4,380 an ounce last week. Technical indicators had shown the ascent was overheated, while growing signs of progress in US-China trade relations have eroded bullion’s haven appeal.

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Still, even after its recent pullback, gold has gained about 50% this year, supported by central-bank buying and interest in the so-called debasement trade, in which investors avoid sovereign debt and currencies to protect themselves from runaway budget deficits.

“The market has experienced a natural correction, but we continue to view this bull market as incomparable with prior bull markets in terms of the breadth and depth of potential monetary demand,” Sebastian Mullins, head of multi-asset and fixed income at Schroders, said in a note.

The surge had drawn institutional and retail buyers to gold-backed exchange-traded funds, although outflows this week have removed some of this support. Total gold ETF holdings fell for a fifth consecutive day on Tuesday — the longest streak of declines since May, according to data compiled by Bloomberg.

Spot gold rose 0.5% to $3,949.50 an ounce as of 1:30 p.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.1%. Silver and platinum were little changed, while palladium advanced.

Market watchers seeking clues on the scale of investor and central bank appetite for bullion will be anticipating the release of the World Gold Council’s quarterly demand report later on Thursday.

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