Gold Prices Dip to Two-Week Low Amid Easing Trade Tensions: See Report

Gold prices have dropped to two-week lows, driven by renewed optimism regarding possible trade deals and a rising U.S. dollar, which have diminished the metal's attractiveness as a safe-haven investment, according to Reuters.

Diminish Gold's Safe-Haven Appeal

Reuters reported that the fall in gold price is mostly due to relaxing tensions in trade between the United States and some of its major trading partners. President Donald Trump's recent comments regarding "potential" trade agreements with India, South Korea, and Japan have given a boost to investor optimism, which has pushed investors away from safe-haven assets such as gold. 

Further, it is reported that the U.S. has approached China to open talks on trade, which further reduced worries over mounting trade wars.

ALSO READ: Gold Price Today: Planning To Buy Gold This Akshaya Tritiya? Check Prices in Delhi, Mumbai, Chennai, Bangalore & More
 

Behind Weak Gold Prices 

The U.S. dollar has seen a significant rise, with the U.S. Dollar Index (DXY) increasing by 0.4%. A higher dollar increases the cost of gold for other currency holders, hence suppressing demand. This currency trend has been the source of downward pressure on gold prices.

Market Waits for Key Economic Indicators

Investors are watching closely for the latest U.S. economic data, such as the non-farm payrolls report, for hints on the future direction of the Federal Reserve's monetary policy moves. Recent data indicated that the U.S. economy shrank 0.3% during the first quarter of 2025, its first decline in three years. 

Although this contraction would lead the Fed to think about cutting interest rates, the central bank has, as yet, been holding back, waiting for more conclusive indications of economic vulnerability.

Outlook for Gold

Analysts recommend that although the near-term prospects for gold are weak on account of enhanced risk sentiment and a rallying dollar, gold's long-run prospects are anchored by persisting economic uncertainties as well as probable changes in monetary policy.

Investors should remain tuned to developments on the global economic front and announcements by central banks, which will continue to direct gold's price action in the months ahead.