Gold holds steady as Trump-Xi talks and Iran risks keep investors cautious

Gold prices were little changed on Thursday as investors weighed high-level talks between US President Donald Trump and Chinese President Xi Jinping, while also watching for any sign of progress in the conflict involving Iran.

Sticky US inflation and a less certain outlook for interest-rate cuts kept bullion from pushing higher, even as geopolitical risks continued to offer some support.

Spot gold was steady at $4,688.43 an ounce by 0212 GMT. US gold futures for June delivery fell 0.2% to $4,695.

The analysts said that the market appeared to be consolidating as traders waited for clearer signals from the US-China talks.

He added that the metal still looked mildly biased to the downside in the short term, though that could create an opening for investors seeking exposure to bullion.

Trade and geopolitics

Trump is heading into a series of meetings with Xi in Beijing, seeking economic gains, trying to preserve a fragile trade truce and navigating wider geopolitical tensions.

Investors are looking for any indication that the talks could ease strains between the world’s two largest economies, while also assessing whether China might play any role in efforts to address the Middle East conflict.

Analysts remain cautious on that front.

While Trump is expected to press China for support in resolving the costly and politically difficult conflict that he launched with Israel in late February, market observers say meaningful backing from Beijing looks unlikely.

That has left gold caught between two competing forces: lingering demand for safe-haven assets and some hesitation among investors to chase prices higher without fresh catalysts.

Inflation and rates

US economic data also stayed firmly in focus.

Figures released on Wednesday showed producer prices posted their biggest annual increase in four years in April, driven by rising costs for goods and services.

The data added to evidence that inflation pressures are proving persistent, complicating the outlook for monetary policy.

The US Senate’s approval of Kevin Warsh as chair of the Federal Reserve reinforced that uncertainty.

The central bank is already grappling with stronger price pressures, which may make it harder to deliver the rate cuts Trump has publicly called for.

Gold is often viewed as a hedge against inflation, but higher interest rates tend to weigh on the non-yielding metal because they raise the opportunity cost of holding bullion.

That tension helped explain Thursday’s muted price action.

India demand weakens

Physical-market signals from India also pointed to softer demand.

Gold discounts in the country widened to a record of more than $200 an ounce on Wednesday after a jump in prices following an import duty increase prompted investor selling in an already weak market, according to bullion dealers.

Elsewhere in precious metals, spot silver fell 0.9% to $87.18 an ounce, platinum slipped 0.4% to $2,129.15, and palladium declined 0.3% to $1,495.75.