Gold prices experienced a modest decline on Wednesday, with the precious metal losing some of its earlier gains as a result of a firmer US dollar and de-escalating trade tensions between the United States and its global partners. Investors are also awaiting key US economic data, which could provide further insights into the Federal Reserve’s rate outlook.
As of 0242 GMT, spot gold was down 0.2%, trading at $3,308.32 per ounce, while US gold futures fell 0.5% to $3,317.50. The dollar rose by 0.1% against a basket of currencies, making gold more expensive for overseas buyers, which contributed to the decline in gold prices.
Nicholas Frappell, global head of institutional markets at ABC Refinery, noted that the slight recovery in the dollar strength led to a retracement in gold prices.
The pullback in gold prices comes after US President Donald Trump signed a pair of orders to ease the impact of his auto tariffs, which included a mix of credits and relief from other levies on materials. Additionally, Trump’s trade team announced its first deal with a foreign trading partner, which helped alleviate concerns over his unpredictable trade policies.
Meanwhile, China has decided to waive the 125% tariff on ethane imports from the US, a move that further reduced investor concerns about trade tensions.
Gold prices had previously surged to a record high of $3,500.05 per ounce on April 22, driven by global economic uncertainties. However, with the easing of trade tensions and the dollar’s slight recovery, gold’s upward momentum has stalled.
Market participants are now closely watching upcoming economic data, including the US personal consumption expenditures (PCE) report due later today, and the non-farm payrolls report scheduled for Friday. These reports will provide crucial clues on how the latest tariff developments may influence the Federal Reserve’s interest rate decisions, which could further impact gold prices.
Capital.com financial market analyst Kyle Rodda remarked, “The PCE data is expected to show further moderation in prices, which could keep the door open for further Fed cuts. However, if there is an upside surprise in the data, the chances of rate cuts may diminish, which could weigh on gold prices.”
Investors are closely monitoring these economic indicators as they navigate the fluctuating dynamics of the global market.
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