Gold Retreats from Its Historical Highs Amid Dollar Pressure and Trump's Statements
Precious metal markets saw a noticeable decline at the end of trading on Friday, October 17, as the price of gold dropped by about 1% at settlement, moving away from its all-time high after surpassing the $4300 per ounce mark. This decline came amid a rise in the US dollar and statements from President Donald Trump, who said that "the 100% tariffs he decided to impose on China will not be sustainable," which raised caution in the markets.
In spot transactions, gold fell by 2.6% to reach $4211.48 per ounce, after recording a session high of $4378.69. Meanwhile, US gold futures for December delivery dropped by 0.89% to close at $4266.40. Despite this decline, the yellow metal maintained weekly gains estimated at around 4.8%.
Gold was on track to achieve its largest daily gains since September 2008, when the collapse of Lehman Brothers triggered a global financial crisis. As fears of escalating trade tensions between the US and China eased following Trump's announcement of his intention to meet with Chinese President Xi Jinping, futures contracts on Wall Street reduced their losses, which reflected on gold's performance.
In this context, Fouad Razaghzadeh, a market analyst at "City Index" and "Forex.com," explained that "stock indices rose from their lows following some positive comments from Donald Trump... We saw a slight decline in gold prices as a result of those comments."
For his part, US Federal Reserve member Christopher Waller expressed his support for a new rate cut on Thursday due to concerns regarding the labor market. Markets are awaiting the council's decision on a 25 basis point cut during its upcoming meeting on October 29 and 30, along with a potential further cut in December.
Since the beginning of the year, gold gains have exceeded 64%, driven by a number of factors, most notably geopolitical tensions, strong speculation about interest rate cuts, purchases by central banks, reduced reliance on the dollar, as well as strong inflows into exchange-traded funds.
In its future forecasts, HSBC raised its average gold price for 2025 by $100 to reach $3455 per ounce, expecting the price to reach $5000 in 2026 due to escalating risks.
As for silver, it fell by more than 3% in spot transactions to record $52.49 per ounce, after previously reaching its all-time high of $54.47. Similarly, platinum continued its losses, registering a decline of more than 6% to around $1640, while palladium plummeted by about 9% to settle at $1467.38 per ounce.
