Gold prices continued their downward trend into a fourth day of trading even as market players saw potential upside amid a potential rate cut. Investors will now continue to closely monitor the meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing.
At 9.30am, gold prices were trading at $4,611, down 0.87% since opening early Friday in Asian trading.
Donald Trump and Xi Jinping called for more stable relations between the United States and China as the two leaders began a two-day summit in Beijing on Thursday.
The meeting is expected to focus on several key issues including trade tariffs, artificial intelligence (AI) and global geopolitical tensions.
Xi also hinted that China wants to expand economic cooperation with US companies when he stressed that the country's economy will continue to open wider to foreign investors.
The statement is seen as Beijing's effort to win the confidence of global investors amid global economic and trade uncertainties.
In other developments, Trump said that Xi offered help to defuse conflicts in the Middle East and pledged not to supply military equipment to Iran.
China is also reported to want to see the Strait of Hormuz fully reopened as the strategic route plays a key role in global energy supplies.
Markets are now trying to assess the possibility of an end to tensions in the Middle East, which could potentially reduce the risk of global oil supply disruptions. The full reopening of the Strait of Hormuz could help stabilize global energy markets and reduce inflationary pressures stemming from rising oil prices.
At the same time, US economic data continued to show high inflationary pressures. US Producer Price Index (PPI) inflation rose at the fastest rate since 2022, while the Consumer Price Index (CPI) recorded its highest increase since 2023.
The development reinforced expectations that the Federal Reserve will keep interest rates high for an extended period to control inflation.
The situation usually puts pressure on gold as the precious metal does not offer interest returns, although demand for safe assets is still supported by global geopolitical uncertainties.
