Gold declines as trade war concerns ease

BENGALURU – Gold fell on April 29 as softening trade tensions between the United States and its trading partners dulled the metal’s safe-haven appeal, while investors awaited US economic data to assess the Federal Reserve’s policy path.

Spot gold fell 0.4 per cent to US$3,329.12 an ounce as at 0211 GMT. US gold futures lost 0.2 per cent to US$3,342.40.

“The risk environment has clearly improved recently, with market participants buoyed by optimism that the worst of the trade tensions may be behind us amid encouraging rhetoric around trade deals,” said IG market strategist Yeap Jun Rong.

US Treasury Secretary Scott Bessent said on April 28 that several top trading partners had made “very good” proposals to avoid US tariffs, with India likely to be among the first to finalise a deal.

China’s recent moves to exempt certain US goods from its retaliatory tariffs showed a willingness to de-escalate trade tensions, he added.

US President Donald Trump’s administration will also move to reduce the impact of his automotive tariffs on April 29 by alleviating some duties imposed on foreign parts in domestically manufactured cars.

But risks are high that the global economy will slip into recession this year, according to a majority of economists in a Reuters poll, with many saying Mr Trump’s tariffs have damaged business sentiment.

On April 28, a widely followed measure of Texas manufacturing activity weakened significantly as executives used words like “chaos” and “insanity” to describe the turmoil spurred by the White House’s tariffs, according to a report by the Federal Reserve Bank of Dallas.

Bullion, traditionally seen as a hedge against political and financial instability, rose to an all-time high of US$3,500.05 an ounce last week due to rising uncertainties.

This year, gold has climbed more than 25 per cent as the trade war, expectations for a global slowdown, and tensions between the Trump administration and the Federal Reserve drove haven demand.

The gains have also been supported by inflows into bullion-backed exchange-traded funds, central-bank buying and signs of strong speculative demand in China, even as physical consumption in the world’s biggest buyer falls.

Investors will monitor economic data this week, including the personal consumption expenditures on April 30, and the non-farm payrolls report on March 2.

“Longer-term structural tailwinds for gold prices are likely to keep the broader upward trend intact, supported by room for ongoing reserve diversification among emerging market central banks,” Mr Yeap said.

Spot silver rose 0.1 per cent to US$33.21 an ounce, platinum was steady at US$986 and palladium lost 0.1 per cent to US$948.06. REUTERS, BLOOMBERG