Gold prices continued their decline on Wednesday, extending the previous day’s sharp sell-off as easing U.S.–China trade tensions triggered a wave of profit-taking. The yellow metal, which recently touched all-time highs, faced renewed selling pressure amid shifting market sentiment.
At 08:55 ET (12:55 GMT), Spot Gold slipped 2.3% to $4,029.90 per ounce, having earlier touched an intraday low of $4,003.39. Meanwhile, U.S. Gold Futures inched up 1.6% to $4,045.34, reflecting mild short-covering activity following Tuesday’s dramatic 5% plunge — the steepest one-day drop since 2020.
The pullback follows a surge to record highs of $4,381.21/oz earlier this week, fueled by geopolitical concerns and expectations of a dovish pivot by the Federal Reserve. Analysts, however, say the rally had become overstretched.
“The catalyst appears to be profit-taking in a market that has been hugely overbought,” noted analysts at ING. “Clearly, traders were getting nervous about how long the uptrend could last.”
Trade Hopes Ease Safe-Haven Demand
Investor appetite for safe-haven assets waned after U.S. President Donald Trump signaled progress in trade negotiations with China, suggesting a potential “good deal” with President Xi Jinping, though he added that talks “may not happen.”
- Trade optimism lifted equities, curbing demand for gold.
- India–U.S. trade talks also boosted risk sentiment, with reports suggesting Washington may cut tariffs on Indian goods to 15%–16% from the current 50%.
- Analysts view this move as strengthening global trade ties and reducing the immediate appeal of defensive assets like gold.
The combination of easing geopolitical tensions and aggressive profit-taking has prompted a short-term correction in metals that had recently soared on inflation hedging and macro uncertainty.
CPI Data and Broader Market Impact
Investors are now eyeing the U.S. Consumer Price Index (CPI) report due Friday, which could provide critical insight into the Fed’s next rate decision. The ongoing U.S. government shutdown has further clouded the macroeconomic outlook, delaying some economic data releases.
Other precious and base metals traded in narrow ranges:
- Silver held near $47.705/oz after a 7% plunge.
- Platinum edged 0.4% higher to $1,525.70/oz.
- Copper firmed 0.4% to $10,654.30 per ton, with U.S. Copper Futures rising 0.3% to $4.9815 per pound.
Despite recent volatility, analysts suggest gold’s longer-term outlook remains constructive, supported by persistent inflation concerns and potential central bank easing.