Gold prices fell in European trade on Friday away from recent record highs, and on track for a weekly loss in profit-taking, while the dollar rebounds against major rivals.

Prices are also pressured by reduced haven demand on news that China might suspend some tariffs on US imports, boosting optimism about the success of trade negotiations.

The Price

Gold prices fell 1.5%  today to $3299 an ounce, with a session-high at $3370.

On Thursday, gold rose 1.9%, resuming losses and approaching a record high at $3500.

Weekly Trades

Gold prices are down 0.9% so far this week on track for the first weekly loss in three weeks.

The Dollar

The dollar index rose 0.6% on Friday, resuming gains against a basket of major rivals and making dollar-denominated gold futures costlier to holders of other currencies.

The dollar’s rebound comes after recent positive statements by Trump on Fed Chair Jerome, asserting he won’t sack him and calming concerns in the financial markets.

Additionally, recent signals that US trade talks with Japan, South Korea, and other partners are progressing also boosted market sentiment.

Trade Developments

Reports indicated that China is considering tariff exemptions for some US products.

Chinese officials also asked the US to remove unilateral tariffs on China as a prerequisite for any trade negotiations. 

Trump already stated that trade talks are currently ongoing with China, despite the latter’s assertions that no official talks are currently taking place.

US Rates

Several Fed officials recently signalled there’s no need to cut interest rates soon as the Fed continues to analyze new data to gauge the impact of US tariffs on the economy.

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stand at only 7%, while the odds of such a cut in June stand at 62%.

SPDR

Gold holdings at the SPDR Gold Trust fell 0.58 tons yesterday to a total of 948.56 tons.

Sterling fell in European trade on Friday against a basket of major rivals, resuming losses against the dollar and backing away from seven-month highs on profit-taking.

Bank of England Governor Andrew Bailey warned against the negative impact of US tariffs on UK economic activities, boosting the odds of a BOE rate cut in May.

Now investors await important UK retail sales later today to gather more clues on the path ahead for interest rates.

The Price

The GBP/USD price fell 0.5% today to $1.3279, with a session-high at $1.3342.

The pound rose 0.65% on Thursday against the dollar, marking the first profit in three days.

The pound backed off a seven-month high against the dollar at $1.3424 last week amid active profit-taking.

Bailey 

Bank of England Governor Andrew Bailey said he’s focusing on the shock that could be felt by the economy due to US tariffs and other retaliatory measures.

He added the BOE is focusing on achieving a nuanced balance between weak growth and inflationary pressures due to local supply restrictions. 

UK Rates

Concerns about recession are renewing pressures once more on global central banks, with the odds of a Bank of England interest rate cut standing at 55% for May.

Now traders await important UK data later today to gather more clues, with retail sales expected  down 0.3% in March, compared to a 1% rise in February.

The Japanese yen fell in Asian trade on Friday against a basket of major  rivals, moving in a negative zone against the dollar and about to mark the first weekly loss in a month on hopes for the success of trade negotiations between the US and its major trade partners.

According to some reports, Washington has already achieved progress in early trade talks with Japan and South Korea, while China is considering tariff exemptions for some US products.

Recent Tokyo inflation data showed prices accelerated for the second straight month, in turn boosting inflationary pressures on the Bank of Japan.

The Price

The USD/JPY price rose 0.6% today to 143.45 yen per dollar, with a session-low at 142.56.

The yen rose 0.6% on Thursday against the dollar, marking the first profit in three days as investors assessed the trade risks amid mixed signals from the Trump administration.

Weekly Trades

The yen is down 1% so far against the dollar this week, on track for the first weekly loss in a month.

Trade Talks

It looks like some progress was achieved in trade talks between the US and its two Asian allies, Japan and South Korea.

Japan’s finance minister said after meeting US Treasury Secretary Scott Bessent that no talks were conducted about forex targets, after Trump recently accused Tokyo of deliberately weakening its currency to boost exports.

Otherwise, the South Korean mission sai on Thursday after an initial round of talks that both sides are seeking a clear framework before removing the reciprocal tariffs in July.

Tokyo Inflation

Earlier Tokyo data showed main consumer prices rose 3.4% in April, passing estimates of 3.2%, and up from 2.4% in March.

It’s a clear sign that prices are maintaining their upward momentum, which boosts the odds of a Japanese interest rate hike later this year.

Ueda

Bank of Japan Kazuo Ueda said the bank will continue to raise interest rates if inflation approaches the 2% target as expected.

However, he added the central bank will look closely into how various data, and how the ramifications of US tariffs, would impact this price target.

A senior official at the International Monetary Fund stated earlier this week that the Bank of Japan will likely put off the timing of new interest rate hikes due to uncertainty about US tariffs.

Soybean prices rose on Thursday as the dollar lost ground against most major rivals while the US-China trade tensions calmed down.

The US administration said it’s considering a reduction in China tariffs from 145% currently to 50%, boosting most assets.

Trump stated on Tuesday that current tariffs on Chinese imports are “too high” and won’t stay long this way, but won’t fall to zero.

Trump stated that he’s talking daily with the Chinese side to reach a deal, but China asserted there are no talks taking place currently with the US before removing unilateral tariffs.

Otherwise, earlier data showed US unemployment claims rose to 222 thousand in the week ending April 19, matching estimates and up from 216 thousand in the previous reading. 

Separately, the dollar index fell 0.4% as of 18:49 GMT to 99.3, with a session-high at 99.8, and a low at 99.2.

Corn

Corn July futures rose 0.8% to $4.84.

Soybeans 

Soybean July futures rose 1.2% to $10.62 a bushel.

Wheat

Wheat July futures added 0.1% to $5.44 a bushel.