Gold prices took a sharp dip on Friday amid signals that China may ease tariffs on select U.S. imports. Spot gold slid by 1.4%, trading at $3,302.81 per ounce by 0636 GMT, while U.S. gold futures dropped 1.1% to $3,312.80. The move follows reports that Beijing is considering exempting certain American goods from the steep 125% tariff wall, reflecting its growing unease over the economic fallout of the ongoing trade war.
The possibility of China dialing back tariffs suggests a potential thaw in U.S.-China trade tensions. According to Reuters, this shift highlights Beijing’s mounting concern about the prolonged standoff’s impact on its economy. Despite Chinese officials downplaying any current negotiations, U.S. President Donald Trump has stated that talks between the two nations are indeed underway.
Market experts view the partial tariff rollback as a sign of cautious optimism. Yeap Jun Rong, a strategist at IG Markets, told Reuters that any steps toward de-escalation in the trade conflict could weaken demand for safe-haven assets like gold, explaining the downward pressure on prices.
Nevertheless, Chinese officials have made it clear that a true resolution would require the United States to remove all unilateral tariffs. Without this gesture, the trade conflict remains far from settled.
Despite the recent pullback, gold has had a strong year. Often seen as a hedge against uncertainty, bullion has set multiple records in 2025, hitting a high of $3,500.05 earlier this week. A strengthening U.S. dollar also contributed to the latest price dip, rising 0.3% and making gold more expensive for overseas buyers.
In the broader picture, long-term fundamentals for gold remain strong. “Structural tailwinds are still in place,” noted Rong, pointing to a global shift in reserve strategies. Emerging markets are gradually aligning their reserve compositions with those of developed nations, a trend that could continue to support gold demand in the future.
