Xi-Trump call signals thaw in tensions; gold dips 1%, silver at 13-yr high

Safe-haven gold reversed course to fall nearly 1 per cent on Thursday after U.S. President Donald Trump and Chinese leader Xi Jinping agreed to further talks to settle trade disputes, while silver breached the key $35 level to reach a 13-year high.

 

Spot gold fell 0.9 per cent to $3,347.79 an ounce, as of 12:12 p.m. EDT (1612 GMT) after trading 0.6 per cent higher earlier. 

U.S. gold futures were down 0.8 per cent at $3,371.60. 

Trump said on social media that the talks focused primarily on trade led to "a very positive conclusion." According to a Chinese government summary, Xi told Trump to back down from trade measures and warned him against threatening steps on Taiwan.

 

"Trump will have a positive spin on the call with President Xi, therefore decreasing the imminent decoupling risks from China and the U.S., which have ultimately been one of the factors driving inflows into precious metals," said Daniel Ghali, commodity strategist at TD Securities. 

Gold, a safe-haven asset during times of political and economic uncertainty, has gained about 28 per cent so far this year. 

Central banks worldwide are set to buy 1,000 metric tons of gold in 2025, marking a fourth straight year of massive purchases as they shift reserves away from dollar assets, Metals Focus said. 

Meanwhile, data showed weekly jobless claims increased for a second straight week. All eyes now turn to Friday's nonfarm payrolls report. 

Trump on Wednesday renewed calls for Federal Reserve Chair Jerome Powell to cut rates. 

"I think that a weakening in the U.S. labor market will increase bets on a dovish Fed, (which) would be positive for gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. 

Zero-yield bullion tends to thrive in a low interest-rate environment. 

Meanwhile, spot silver jumped 1.4 per cent to $35.45, after hitting its highest level since February 2012 earlier. The gold-silver ratio was currently at 94, down from 105 in April. 

"Extreme volatility may be back here as silver can really gallop, both ways," said Tai Wong, an independent metals trader.

Platinum rose 4.8 per cent to $1,137.10, its highest level since March 2022, and palladium rose 0.6 per cent at $1,006.21.