Gold Falls as U.S. Trade Deal Prospects Cut Safe-haven Demand
Gold fell for a third day on signs of potential progress in trade talks between the U.S. and some other countries, hurting demand for safe-haven assets even as signs of a slowdown emerged in the world’s largest economies.
Prices fell as much as 1.8% as investors weighed improved sentiment on Wall Street after Donald Trump’s trade representative said he was close to announcing the first phase of a deal. Adding to optimism, China Central Television said the U.S. has been in contact with Beijing through multiple channels.
Gold remains about a quarter higher this year after hitting a record above $3,500 last week before losing some ground. The gains have been driven largely by investors seeking refuge in safe-haven assets as Trump’s rapidly evolving trade policies upended markets and stoked fears of a global slowdown. Speculative demand in China and central bank buying have also supported the rally.
Data on Wednesday showed the U.S. economy contracted at the start of the year for the first time since 2022 on a monumental pre-tariff surge in imports. That has traders raising bets on U.S. monetary easing, with four quarter-point interest rate cuts expected this year by the Federal Reserve to help stave off a recession. Lower rates are usually positive for bullion because it doesn’t pay interest.
Looking ahead, the key U.S. monthly jobs report due on Friday will shed more light on the early effects of Trump’s trade policies on the economy.
Spot gold fell 1.7% to $3,231.84 an ounce as of 11:23 a.m. in Singapore. The Bloomberg Dollar Spot Index edged up. Silver fell more than 1%, as platinum and palladium fell slightly.
Source: Bloomberg
