Gold prices fell today (Wednesday) as easing trade tensions between the United States and China reduced investor demand for safe-haven assets, while markets braced for fresh inflation data that could shape the Federal Reserve’s monetary policy outlook.
By 04:30 GMT, spot gold had declined by 0.7%, trading at $3,226.11 per ounce, while US gold futures slid 0.6% to $3,229.50.
“Positive developments in US trade policy are reducing gold’s appeal in the near term,” said Kyle Rodda, financial markets analyst at Capital.com. He noted that if the momentum in trade negotiations continues and leads to further agreements, gold could fall further, with $3,200 identified as a key support level.
The market was buoyed by a recent executive order from the White House indicating a reduction in tariffs on low-value Chinese imports to 30%, signaling a potential breakthrough in the long-standing trade dispute between the world’s two largest economies.
On the economic front, the US Labor Department reported that the Consumer Price Index (CPI) rose by 0.2% in April, slightly below the 0.3% increase expected by analysts, following a 0.1% decline in March.
Investors now await Thursday’s Producer Price Index (PPI) data for additional signals on inflation trends and future interest rate decisions. Market forecasts suggest a 53-basis point cut in US interest rates this year, possibly starting in September.
Gold, traditionally seen as a hedge against uncertainty, often reacts to shifts in geopolitical tensions, inflation expectations, and interest rate outlooks.
