Gold prices fell to their lowest in two weeks on Thursday, pressured by a strengthening U.S. dollar and signs of progress in global trade negotiations that reduced demand for safe-haven assets. U.S. gold futures lost 2.4%, extending a three-day losing streak after recently hitting record highs above $3,500.
The U.S. dollar rose 0.3%, making gold more expensive for foreign investors. Meanwhile, U.S. President Donald Trump signaled potential trade deals with India, South Korea, Japan, and renewed contact with China—dampening fears of a broader trade war that had previously fueled gold’s rally.
Despite the pullback, gold remains up roughly 25% year-to-date, supported by central bank purchases and safe-haven buying during periods of heightened geopolitical and financial uncertainty. However, easing panic and improving sentiment have recently reversed some of those gains.
Economic data showed the U.S. economy contracted in Q1 2025 for the first time in three years, largely due to businesses accelerating imports ahead of anticipated tariffs. Markets are now anticipating up to four rate cuts by the Federal Reserve this year, which could support gold in the longer term due to its appeal in low-interest environments.
Investors are awaiting the upcoming U.S. non-farm payrolls report for further clues on the Fed’s policy direction. Meanwhile, China’s markets are closed from May 1–5 for the Labour Day holiday, reducing trading volumes.