Gold Falls from Record High After Trump’s Tariff Remarks on China
Precious metals retreat as easing trade fears and Fed rate-cut expectations reshape investor sentiment.
Gold prices fell sharply on Friday, October 17, retreating from an all-time high above $4,300 per ounce, after U.S. President Donald Trump stated that the 100% tariffs he imposed on Chinese imports would not be sustainable. The statement eased market fears of prolonged trade escalation, triggering profit-taking in precious metals.
Market mood shifts amid U.S.–China tension
Global markets have been rattled by the intensifying trade dispute between the United States and China. Beijing accused Washington of causing panic over restrictions on rare-earth exports and rejected calls to lift export bans. This geopolitical strain had earlier driven safe-haven buying in gold and other precious metals.
According to CNBC Arabia, spot gold prices dropped 1.4% to $4,261.99 per ounce, after hitting a record $4,378.69 earlier in the session. Meanwhile, U.S. gold futures for December delivery rose 0.4% to $4,320.70 per ounce.
Despite the pullback, gold is still up about 7.2% this week, marking one of its strongest rallies since September 2008, when the collapse of Lehman Brothers triggered a global financial crisis.
Wall Street pares losses after Trump–Xi meeting hint
U.S. stock futures on Wall Street pared losses after Trump confirmed plans to meet Chinese President Xi Jinping, easing fears of an immediate trade escalation between the world’s two largest economies.
Market analyst Fawad Razaqzada of City Index and Forex.com noted, “Stock indices rebounded from session lows following Trump’s positive comments… We also saw a slight drop in gold prices as a reaction to those remarks.”
Fed rate cut expectations add to volatility
On Thursday, Federal Reserve Board member Christopher Waller voiced support for another interest-rate cut due to concerns about the U.S. labor market. Investors now expect a 25-basis-point reduction during the Fed’s October 29–30 meeting, with another cut anticipated in December.
Since the beginning of the year, gold has gained more than 64%, fueled by geopolitical uncertainty, strong expectations of rate cuts, central-bank buying, a reduced reliance on the dollar, and heavy inflows into gold-backed exchange-traded funds (ETFs).
Forecasts and performance of other metals
HSBC raised its average gold price forecast for 2025 by $100, to $3,455 per ounce, and expects gold to reach $5,000 per ounce in 2026 amid rising global risk.
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Silver dropped over 3% to $52.49 per ounce, after hitting a record $54.47, mirroring gold’s reversal.
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Platinum fell 5% to $1,617.82, and palladium plunged 7% to $1,499.75 per ounce.
The shift reflects investors’ recalibration of risk following the latest tariff remarks, with attention now turning to upcoming U.S.-China negotiations and Federal Reserve policy decisions.
