Gold falls sharply from record high as Trump softens stance on China

Reuters reported that gold prices fell more than 2% on Friday (October 17, 2025) after hitting a record high above US$4,300 per ounce, pressured by a stronger US dollar and comments from US President Donald Trump suggesting that imposing tariffs on China on a “full scale” would be unsustainable.

Spot gold dropped 2.6% to US$4,211.48 an ounce at 1:38 p.m. Eastern Time (17:38 GMT) after earlier reaching an all-time high of US$4,378.69. The precious metal had surged past US$4,300 an ounce for the first time on Thursday and was still on track for a weekly gain of around 4.8%.

US gold futures for December delivery settled down 2.1% at US$4,213.30.

The US dollar index rose 0.1%, making dollar-priced gold more expensive for overseas buyers.

Earlier in the session, gold had been heading for its largest temporary weekly rise since September 2008, when the collapse of Lehman Brothers triggered the global financial crisis.

“I think Trump’s more conciliatory tone since the initial announcement of the 100% import tariff has helped ease tensions in this highly traded asset,” said independent metals trader Tai Wong.

On Friday, Trump also confirmed plans to meet Chinese President Xi Jinping, helping to calm market concerns over an escalating trade dispute between the two nations.

Gold — a traditional hedge against uncertainty — has surged more than 64% this year, supported by geopolitical tensions, central bank purchases, a flight from the US dollar, and strong inflows into gold-backed funds. Expectations of US interest rate cuts have further boosted the appeal of this non-yielding asset.

“We forecast average gold prices at US$4,488 in 2026 and see additional upside risks from broader structural factors supporting the market,” said Suki Cooper, Head of Global Commodity Research at Standard Chartered Bank.

Markets are currently pricing in a 0.25% rate cut by the US Federal Reserve in October and another expected in December.

HSBC has raised its 2025 average gold price forecast by US$100 to US$3,455 per ounce and expects prices to reach as high as US$5,000 in 2026.

Meanwhile, physical gold demand in Asia remains strong despite record-breaking prices, with gold in India trading at its highest level in a decade ahead of the festive season.

Spot silver fell 5.6% to US$51.20 per ounce after hitting a record US$54.47 earlier in the session, mirroring gold’s movement but still poised for a 2% weekly gain.

Platinum dropped 6.1% to US$1,607.85 per ounce, while palladium slid 7.9% to US$1,485.50.