Equity markets dropped on concerns the China-U.S. trade truce may prove fleeting

Gold prices rose 2% on Thursday, buoyed by lingering uncertainty over the outcome of a trade deal between China and the U.S as well as a Federal Reserve interest rate cut.

Spot gold was up 1.9% at $4,003.62 per ounce as of 1739 GMT. U.S. gold futures for December delivery settled 0.4% higher at $4,015.9 per ounce.

U.S. President Donald Trump said on Thursday he would reduce tariffs on China to 47% from 57% in exchange for Beijing resuming U.S. soybean purchases and rare earth exports, and cracking down on illicit fentanyl trade.

You’ve seen a little bit of weakness (in gold) but as the details (of the China-U.S. deal) came out and people realized it was a pretty hollow agreement, you’ve seen the markets back off of any optimism that the trade wars are over, said CPM Group managing partner Jeffrey Christian.

Equity markets dropped on concerns the China-U.S. trade truce may prove fleeting.

Meanwhile, the U.S. central bank lowered interest rates on Wednesday, in line with market expectations, but signalled it may be the final cut this year as the ongoing government shutdown threatens the availability of key economic data.

Safe-haven gold becomes more attractive in a low-interest rate environment as it is a non-yielding asset. It also tends to thrive during periods of geopolitical and economic uncertainty.

The Wells Fargo Investment Institute raised its 2026 year-end target for gold to a range of $4,500-$4,700/oz, up from $3,900-$4,100/oz earlier, citing geopolitical and trade policy uncertainty.

We expect these question marks will continue to support private and official demand and drive higher prices, analysts said in a note.