Gold steadied on Thursday, clawing back some of the ground lost earlier this week as renewed US–China trade tensions and fresh sanctions on Russia revived demand for safe-haven assets.
Spot gold was trading at $4,114 an ounce by 09:55 GMT after plunging more than 6% on Tuesday and briefly touching a two-week low of $4,003 on Wednesday.
The rebound comes after a bruising stretch for the metal, which had rallied to record highs before investors locked in profits amid signs that Washington and Beijing were making progress on trade.
Expectations that the Fed would cut rates again this month and once again later this year have lent some support to bullion. Lower rates reduce the opportunity cost of holding non-yielding assets like gold.
That narrative shifted yesterday. Reports that the Trump administration is considering new curbs on software exports to China, a potential response to Beijing’s latest rare earth restrictions, reignited trade worries. While no action has been confirmed, the headline was enough to sour sentiment and prompt a defensive bid for gold.
At the same time, the US imposed its first Ukraine-related sanctions of this term on Russia’s Rosneft and Lukoil, while the EU approved a new sanctions package banning Russian liquified natural gas imports and targeting dozens more tankers linked to Moscow’s “shadow fleet.”
The combination of geopolitical flare-ups has put gold back on the radar ahead of Friday’s delayed US inflation data. The September CPI release, postponed due to the government shutdown, is expected to guide expectations for next week’s Federal Reserve meeting, a key test for the metal’s near-term momentum.