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Investing.com -- Gold prices edged higher Friday, but were heading for a second consecutive weekly loss as the Federal Reserve’s cautious tone on future interest rate cuts and signs of easing U.S.-China trade tensions dented demand for the safe-haven metal.
At 09:05 ET (13:05 GMT), Spot gold gained 0.1% to $4,027.18 an ounce and U.S. Gold Futures edged up 0.6% to $4,039.56 an ounce.
Bullion was still set to fall around 2% for the week.
Gold hit by Fed’s caution tone, Trump-Xi talks
The Fed cut its benchmark rate by 25 basis points on Wednesday to a range of 3.75%-4.00%, as widely expected. But Chair Jerome Powell signaled uncertainty about additional cuts, saying a December move was “far from a foregone conclusion.”
His comments pushed U.S. Treasury yields and the dollar higher, eroding gold’s appeal since the metal pays no interest.
Adding to the pressure, risk appetite improved after U.S. President Donald Trump said trade negotiations with China had made “amazing” progress and that a deal could come “pretty soon.”
The two leaders met in South Korea on Thursday, agreeing to cut a 10% tariff on fentanyl-linked imports, while China resumed U.S. soybean purchases and paused new rare-earth export curbs.
The easing trade tensions removed one of gold’s key supports, as investors shifted toward risk assets on optimism over a potential deal.
Metal markets subdued
Other precious and industrial metals traded in tight ranges on Friday. Silver futures edged 0.1% higher to $48.710 per ounce, while Platinum Futures slipped 1% to $1,597.95/oz.
Benchmark Copper Futures on the London Metal Exchange slipped 0.1% to $10,905.05 a ton, and U.S. Copper Futures declined 0.1% to $5.0995 a pound.
Data on Friday showed that Chinese manufacturing activity contracted for a seventh consecutive month, reinforcing concerns over sluggish recovery in the world’s second-largest economy.
The data fueled speculation that Beijing may soon announce additional support measures.
Ayshman Ojha contributed to this article