Gold prices in global markets fell to a three-month low on Friday. Spot gold fell to $1,455.80, its lowest since August 5. US gold futures settled down 0.2% at $1,462.90. Optimism that the US and China close to signing an interim trade deal put pressure on gold prices. Silver dropped 1.2% to $16.90 per ounce. "Gold remained under pressure amid positive signals on US China trade front," said Yes Securities.
Tariffs could be lifted if a U.S.-China trade agreement is reached, a White House spokeswoman said. But uncertainty about the trade talks, however, prevailed as U.S. President Donald Trump on Friday told reporters that he had not agreed to roll back tariffs on China.
JP Morgan Securities unwound its gold hedge because of “signs of a cyclical recovery, easing geopolitical tensions, synchronized monetary easing," the bank’s asset-allocation team said Thursday. Citigroup Inc. strategists abandoned a long position in gold, in their asset-allocation note Thursday.
The US-China trade war is one of the key reasons for bullion, which is considered a safer asset during economic and political uncertainties, rising about 14% so far this year.
Gold also benefited from dovish monetary policies by global central banks, but the Fed's recent decision to hold back on further cuts until the economy takes a downturn weighed on bullion, analysts said.
Platinum fell 2% to $890.47 per ounce.
Back in India, gold prices rose 0.28% on Friday to ₹37,682 per 10 gram on MCX, lifted by a weaker rupee. But as compared to early September highs of about ₹40,000 per 10 gram, gold prices are down about ₹2,300.
Silver rates on MCX fell sharply by 0.50% to ₹43,950. Despite the recent fall, gold prices in India are up about 20% so far this year. Demand for gold in India this year is likely to drop to the lowest since 2016 as elevated prices and a weak economy deter buyers in the world’s second-biggest bullion consumer, according to the World Gold Council.