Monitoring Desk
Gold prices fell on Wednesday as easing U.S.-China trade tensions dampened safe-haven demand, while investors turned their attention to fresh U.S. inflation data that could shape the Federal Reserve’s interest rate outlook.
Spot gold was down 0.7% to $3,226.11 per ounce by 0430 GMT, while U.S. gold futures dipped 0.6% to $3,229.50.
“Positive developments in U.S. trade policy are reducing gold’s short-term appeal,” said Kyle Rodda, financial market analyst at Capital.com. “If trade negotiations continue to progress, we could see gold retreat further. The $3,200 mark is a critical support level.”
The decline came after the White House issued an executive order to cut the “de minimus” tariff on low-value shipments from China to 30% — a move seen as a de-escalation of the long-running trade dispute between the world’s top two economies.
Adding to the optimism, U.S. President Donald Trump on Monday said he does not expect tariffs on Chinese goods to revert to 145% following a 90-day truce, expressing hope for a potential deal with Beijing.
Meanwhile, the U.S. Labor Department reported a 0.2% rise in the Consumer Price Index (CPI) for April, slightly below economists’ forecast of 0.3%. This followed a 0.1% decline in March, reinforcing expectations of a mild inflation trajectory.
Markets are now awaiting Thursday’s Producer Price Index (PPI) data, a key inflation metric that could influence the Fed’s monetary policy stance. Traders currently anticipate around 53 basis points of rate cuts this year, likely beginning in September.
Gold typically benefits in a low-interest-rate environment and is widely viewed as a hedge against inflation and economic uncertainty.
On Tuesday, President Trump reiterated his call for rate cuts, citing falling prices for fuel, groceries, and other essentials.
In other precious metals, spot silver dropped 0.8% to $32.61 per ounce, platinum held steady at $988.65, and palladium slid 0.9% to $948.60.
