New Delhi

Gold prices retreated by Rs 839 to Rs 95,073 per 10 grams in futures trade on Friday as the US dollar strengthened amid a potential de-escalation of the US-China trade war.

On the Multi Commodity Exchange, gold contracts for June delivery dropped by Rs 839 or 0.87 per cent to Rs 95,073 per 10 grams in a business turnover of 18,007 lots.

In addition, the August contract of the precious metal dipped Rs 760 or 0.79 per cent to trade at Rs 95,858 per 10 grams on the bourse.

Analysts attributed the fall in gold prices to weak global cues.

On the global front, gold futures slipped by USD 40.26 or 1.20 per cent to USD 3,308.34 per ounce in New York.

"Gold prices are under pressure as the US dollar strengthens on hopes of progress in US-China trade talks," Abans Financial Services' Chief Executive Officer Chintan Mehta said.

In a notable shift, China is considering exempting some US imports from its steep 125 per cent tariffs and has asked businesses to identify products that could qualify -- the strongest indication yet that Beijing is growing increasingly anxious about the economic fallout of the trade war.

This development is easing safe-haven demand for gold as investors anticipate a potential thaw in tensions. If this trend persists, gold may remain on the back foot in the near term, he said.

On the geopolitical front, escalating tensions between India and Pakistan, creating a volatile environment where investors are looking to hedge against volatility and geopolitical instability.

Mehta further said that attention will turn to the upcoming IMF's meeting this weekend, where any indications of further policy easing or extended global uncertainty could enhance gold's appeal and reinforce safe-haven demand.

According to HDFC Securities' Senior Analyst of Commodities Saumil Gandhi, traders are looking forward to US macroeconomic data, including the Michigan Consumer Sentiment Index and 1-year inflation expectations to be released later in the day.

The data release will gauge the strength of the economy and potential future monetary policy decisions by the US Federal Reserve.

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Additionally, trade-related comments may have an impact on the overall market direction, Gandhi said.

Meanwhile, gold prices in spot markets in Mumbai dropped by Rs 655 to Rs 95,631 per 10 grams (99.9 purity). The standard gold (99.5 purity) declined by Rs 652 to Rs 95,248 per 10 grams. Bullion markets were closed in Delhi due to a bandh called by traders to protest against the Pahalgam terror attack.