Gold prices retreated for a second consecutive session as U.S. President Donald Trump softened his rhetoric on both the Federal Reserve and trade relations with China, easing investor anxiety that had recently driven the precious metal to historic highs.
U.S. gold futures fell by 2.3% to $3,340.60. The decline comes after a strong rally that had pushed gold prices up more than 26% since the beginning of the year.
The pullback began as investors took profits after the rally, but losses deepened following Trump's comments indicating that he has no intention of firing Federal Reserve Chair Jerome Powell, despite previous criticism. The president also struck a more optimistic tone regarding the ongoing trade dispute with China, stating that tariffs would be “substantially reduced,” although not eliminated, if negotiations progress.
“The market interpreted Trump’s remarks as a de-escalation of tensions, which reduced safe-haven demand for gold,” said UBS analyst Giovanni Staunovo. Despite the recent dip, he still sees potential for gold to climb back to $3,500/oz in the coming months, supported by a fragile macroeconomic backdrop.
Even with the recent correction, gold continues to benefit from broader concerns about global economic stability. The International Monetary Fund recently downgraded its forecasts for U.S. and global growth, pointing directly to trade tensions and protectionist policies as primary risks. These uncertainties, along with central bank buying and rising demand from gold-backed ETFs, have been key drivers behind gold's remarkable surge in 2025.
Looking ahead, JPMorgan remains bullish on the yellow metal, forecasting that gold could break the $4,000-per-ounce mark in 2026.