Gold Holds Above US$4,000 as Trade Truce Fails to Silence Strategic Tensions

Highlights:

• Gold prices held above US$4,000 an ounce at the time of writing, extending a rebound after a 2.4% surge in the previous session that ended a four-day losing streak.
• The US–China trade truce between Presidents Donald Trump and Xi Jinping offered short-term relief but failed to ease long-term concerns over strategic and economic competition.
• Analysts say renewed uncertainty and limited Fed rate-cut expectations could keep gold supported through year-end, despite the metal being down over 2% for the week and nearly 10% below its October 20 peak.

Calm surface, simmering undercurrents

At the time of writing, gold sustained its position above US$4,000 an ounce, after climbing 2.4 per cent in the previous session to end a four-day losing streak. The rebound comes as traders digest the recent tentative truce between the Donald Trump and Xi Jinping, signalling a pause in the escalating trade war but leaving deeper economic rivalries between the United States and China unresolved.

Safe haven status resets

Despite the headline deal, market participants remain wary. The truce appears to offer merely a one-year pause — enough to reduce immediate risks of tariffs, but not to address longer-term strategic shifts. That has bolstered interest in gold, as geopolitical and economic uncertainty re-enters the frame. As one analyst put it, “uncertainty is creeping back into markets after the US-China trade truce update, which should see dip buyers adding support for gold for the remainder of the year.”

Monetary policy and structural questions loom

The macro-backdrop is further complicating the story. While the Federal Reserve’s recent quarter-point rate cut provided a boost to gold by reducing real yields, the signal that further cuts may be limited has introduced a restraining factor. Simultaneously, global central-bank demand remains robust, and with gold having surged more than 50 per cent this year, the question is shifting from “how high?” to “how sustainable?”

Looking ahead

As markets balance the temporary reprieve in trade conflict with the deeper industrial and strategic competition between the US and China, gold appears to be holding ground as a hedge rather than charging ahead in full-on rally mode. The key variables—central-bank purchases, flows into gold-ETFs, real interest-rates and the durability of the trade settlement—will determine whether current levels represent a base for the next leg up or the peak of this run.

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