Gold prices fell on Wednesday as a stronger dollar and easing trade tensions between the U.S. and its partners dampened safe-haven demand, while markets awaited key U.S. economic data to gauge the Federal Reserve’s next move on interest rates.
Spot gold dropped 0.2% to $3,308.32 an ounce, while U.S. gold futures slipped 0.5% to $3,317.50. The dollar index rose 0.1%, making gold more expensive for foreign buyers. Nicholas Frabel of ABC Refinery attributed the gold dip to the dollar’s slight rebound.
The decline followed announcements by U.S. President Donald Trump easing auto tariffs and hinting at a deal with a foreign trade partner, reducing market anxiety. Additionally, China lifted a 125% tariff on U.S. ethane imports imposed earlier this month.
Gold, which hit a record $3,500.05 an ounce on April 22 amid global uncertainty, is now under pressure as investors await U.S. personal consumption expenditures (PCE) data and Friday’s nonfarm payrolls report. These will influence Fed rate expectations.
Analyst Kyle Rodda noted that weaker-than-expected PCE could keep hopes for rate cuts alive, but stronger data might weigh on gold. Traders currently expect the Fed to cut rates by around 97 basis points by the end of 2025.
