Gold prices slid in early Asian trading on Wednesday, pressured by renewed investor confidence in risk assets following the announcement of upcoming U.S.-China trade talks. Spot gold dropped 1.3% to $3,384.71 per ounce, while June gold futures dipped 0.9% to $3,392.74 as of 00:36 ET (04:36 GMT).
The downturn follows a modest rally earlier in the week, driven by geopolitical tensions and trade uncertainty. However, confirmation that high-level U.S. and Chinese officials will meet in Switzerland has shifted market sentiment away from safe havens.
Key developments:
- U.S. and China to hold formal trade discussions this week
- Asian equities and Wall Street futures gained on optimism
- Traders remain cautious about any near-term trade deal
President Donald Trump tempered expectations, noting on Tuesday that no immediate trade agreements were on the table. Despite ongoing tariff pressures—both nations have imposed duties exceeding 100%—investors see diplomacy as a step toward deescalation.
Dollar Strength Pressures Precious Metals
In addition to improved risk sentiment, gold and other metals came under pressure from a firming U.S. dollar ahead of the Federal Reserve’s latest policy decision. A stronger dollar often reduces demand for dollar-denominated commodities like gold.
Other precious metals also declined:
- Silver futures slipped 0.5% to $33.208 per ounce
- Platinum futures eased 0.5% to $987.40 per ounce
While geopolitical instability—such as heightened military tensions between India and Pakistan—typically supports haven demand, the market reaction remained muted. Broader investor appetite for risk outweighed concerns stemming from the region.
Industrial Metals Slide Ahead of Fed Meeting
Industrial metals followed suit, with copper prices edging lower as markets braced for signals from the U.S. central bank. Although the Fed is expected to hold interest rates steady, traders are watching for Chair Jerome Powell’s guidance on future moves.
Copper performance:
- London benchmark copper fell 0.9% to $9,456.50 per ton
- U.S. copper futures slipped 0.9% to $4.7135 per pound
While Trump has called for rate cuts to counter trade-driven economic headwinds, the Fed is unlikely to act without more definitive signs of slowing growth. Inflation expectations and tariff impacts remain key variables.
As the global market landscape evolves with trade diplomacy and central bank policy in focus, gold’s next move hinges on how risk appetite and macro signals develop in the days ahead.
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