Mubasher: Gold prices declined on Friday as investor appetite went for riskier assets on prospects that the US and China could soon reach a trade agreement.

However, the precious metal was on course to post its second weekly gain as the US Federal Reserve announced a pause in interest rate hikes.

By 8:48 am GMT, US gold futures declined 0.18% to $1,322.80 per ounce, while spot gold fell also 0.18% to $1,318.82 per ounce.

US President Donald Trump on Thursday said that he will meet soon with Chinese President Xi Jinping to work on sealing a comprehensive trade deal, after two days of high-profile talks yielded a “substantial progress.”

“If there is real progress on the trade talks, that could hurt gold because that better outlook would mean the [Fed’s] accommodative stance will not come into play,” CMC Markets chief markets strategist Michael McCarthy told Thomson Reuters.

The Fed on Wednesday said that it would keep its interest rates at their current levels and would be patient in raising borrowing costs further this year, citing mounting anxieties about the economic prospects.

Investors tend to sell gold to purchase other asset classes at the time interest rates rise, as bullions do not yield interest.

“There would be concerns with the gold bulls in that scenario, but markets generally have become a little weary about responding to announcements from the White House,” McCarthy said, adding “too many have proved to be contradicted in the near future.”

Moreover, investors stood cautious ahead of US job figures due later in the day, as analysts were uncertain about the impact of partial government shutdown on employment.