Gold prices rebounded on Thursday, buoyed by bargain hunting after the precious metal slipped to a one-week low in the previous session amid renewed optimism surrounding US-China trade relations.
Gold futures were up 1.7% to $3,349.30 per ounce at the time of writing, while the spot price climbed 0.4% to trade at $3,330.04 an ounce.
The moves come after a volatile week for the yellow metal, which hit a record high of $3,500.05 on Tuesday before sliding below $3,300 on Wednesday.
Analysts attributed Thursday’s rally to investors capitalising on the dip, reassured by resilient underlying fundamentals.
"The kind of volatility we're seeing this week is being driven by technicals and headline risk. But the fundamentals are strong, so dip buying is effectively a function of investors moving in on the basis of the bigger picture," Capital.com's financial market analyst Kyle Rodda said.
Gold, which offers no yield, has long been viewed as a haven during times of geopolitical or economic uncertainty. That appeal appeared to strengthen further on Thursday following news of intensified conflict in Ukraine. A deadly drone and missile assault on Kyiv by Russian forces — even as ceasefire talks, brokered by the US, continue — has heightened concerns over regional instability.
Adding to the bullish sentiment, JP Morgan analysts reiterated their forecast that spot gold could reach $4,000 per ounce by 2026, citing continued global macroeconomic uncertainty and persistent demand for safe haven assets.
The pound pushed higher against the dollar in early European trading, up 0.2% to $1.3283, buoyed by investor unease over US trade policy, as renewed uncertainty around US president Donald Trump’s tariff plans continued to drag on the greenback.
The US Dollar Index (DX-Y.NYB), which measures the greenback against a basket of six major currencies, was down by 0.4% at the time of writing, at 99.50.
The dollar’s weakness follows a flurry of policy signals from Washington that have rattled currency markets. On Wednesday, Trump said a 25% tariff on Canadian car imports could be raised further as part of efforts to bolster domestic auto manufacturing and curb reliance on foreign vehicles.
However, the Financial Times reported that the White House is now considering exemptions for car parts in tariffs targeting China, aimed at punishing Beijing for its role in the export of fentanyl precursor chemicals.
Trump also floated the possibility of lowering his administration’s steep 145% tariffs on China, but suggested any easing would hinge on Beijing rejoining negotiations — something Chinese officials have so far resisted.
Earlier this month, on what Trump called “liberation day,” the US imposed sweeping reciprocal tariffs of up to 50% on nearly all its trading partners. The administration later revised these to a 10% baseline for a 90-day period, while also announcing that consumer electronics such as laptops and smartphones would be temporarily exempt — though these goods could still face separate duties later in the year.
The lack of clarity has unsettled currency markets and left the dollar vulnerable.
Elsewhere in currency markets, the pound lost 0.1% against the euro, trading at €1.1686.
Oil prices rose after falling by around 2% in the previous session as investors gauged a potential OPEC+ output increase amid conflicting tariff signals from the White House and ongoing US-Iran nuclear talks.
Brent crude futures were up 1% to $66.74 a barrel on Thursday morning, while US West Texas Intermediate (WTI) crude rose 1.2% to $62.99 a barrel.
Prices fell 2% during the previous trading session after Reuters reported that several OPEC+ members suggest the group will accelerate oil production increases for the second consecutive month in June, citing three sources familiar with OPEC+ talks.
"While yesterday's risk-on move lifted most risk assets, oil lagged behind due to disagreements within OPEC+", ING analysts wrote in a note.
The prospect of increased Iranian crude supplies is also looming large. The US and Iran are scheduled to begin a third round of nuclear negotiations this weekend, aimed at reviving a deal that would cap Tehran’s uranium enrichment in exchange for sanctions relief. Such an agreement could pave the way for the return of Iranian oil to global markets.
In broader market movements, the FTSE 100 (^FTSE) moved lower on Thursday, down by 0.1% to 8,392.99 points at the time of writing. For more details, check our live coverage here.
