Gold prices declined on Wednesday, pressured by a stronger U.S. dollar and easing trade tensions, as investors looked ahead to crucial U.S. economic data later this week to assess the Federal Reserve’s monetary policy direction.
As of 0624 GMT, spot gold was down 0.3%, trading at $3,306.18 per ounce. Despite the drop, the precious metal was on track to mark its fourth consecutive monthly gain, rising nearly 6% so far in April.
The dollar index (.DXY) gained 0.1% against a basket of major currencies, making gold more expensive for buyers holding foreign currencies. Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, noted, “There has been a minor recovery in the broad dollar strength, which has led to a slight retracement in gold prices.”
The decline in gold prices followed news that U.S. President Donald Trump had signed two executive orders aimed at reducing the impact of his auto tariffs. Additionally, the U.S. trade team highlighted its first agreement with a foreign trading partner, signaling easing trade tensions.
However, Capital.com financial market analyst Kyle Rodda cautioned, “Even though the Trump administration is softening tariffs, they remain high, and confidence in U.S. assets may have been permanently affected.”
Gold, often seen as a safe-haven asset during periods of political and economic instability, surged to a record high of $3,500.05 per ounce on April 22, as investors sought refuge amid global uncertainty.
Market participants are closely monitoring key U.S. economic data, including the personal consumption expenditures (PCE) report scheduled for later today and the non-farm payrolls data set for release on Friday. These reports are expected to offer more insights into the potential impact of the tariffs on the Federal Reserve’s interest rate decisions.
Rodda added, “The PCE data is expected to show further moderation in prices, which could keep the door open for additional Fed rate cuts. However, if the data surprises on the upside, the likelihood of further cuts may diminish, potentially putting downward pressure on gold prices.”
Currently, traders anticipate that the Fed may cut interest rates by approximately 95 basis points by the end of 2025.
Other precious metals also saw declines, with spot silver down 0.3% at $32.87 per ounce, platinum easing 0.1% to $975.95, and palladium losing 0.2% to $932.87.
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