Gold prices fell in early European trading on Friday, as investor concerns over tariffs continued to ease, denting the precious metal’s appeal as a safe-haven asset.

Gold futures (GC=F) declined 0.4% to $3,213.50 per ounce at the time of writing, while the spot gold price fell nearly 1% to $3,208.59 per ounce.

The precious metal had surged in the wake of “Liberation Day” on 2 April, when US president Donald Trump announced sweeping tariffs. Investors flocked to gold, as it is considered to act as a hedge in times of economic and political uncertainty.

However, gold prices declined this week, on the back of news that the US and China had agreed to slash tariffs on each other’s imports by 115% for 90 days, marking a de-escalation in trade tensions.

In a note on Thursday, Capital Economics climate and commodities economist Hamad Hussain said: “After an extraordinary rally in gold prices, the recent pullback naturally raises the question of where gold prices may be headed next. In our view, the rest of this year will prove more challenging for gold prices than the first few months.

“However, the structural factors which have been key drivers of the gold rally will put a floor under prices this year and probably boost gold to new all-time highs next year.”

He said that “while gold prices could feasibly fall further in the near term, we are comfortable with our forecast for prices to end this year at $3,300 per ounce – about 4% higher than the current level. Looking further ahead, we expect gold prices to rise to a record high of $3,600 by the end of 2026, which is well above the consensus.”