Gold Tumbles As US-China Trade Talks Euphoria Offsets India-Pakistan Escalation
Gold (XAU/USD) slid lower on Wednesday (07/05) to $3,390 at the time of writing, ahead of the Federal Reserve’s (Fed) interest rate decision and after statements from China and the United States (US) confirmed that trade talks will begin later this week. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will travel later this week to Switzerland for trade talks with a Chinese delegation, led by Vice Premier He Lifeng, seeking to defuse tariff tensions that have threatened to hit both economies. In the first phase, there will be no trade talks as such, although talks are underway to ease the situation, according to Bessent on Fox News.
The news comes ahead of the Federal Reserve’s interest rate decision, which will take place on Wednesday during the American session. According to the CME Fedwatch tool, there is a 95.6% chance of no rate change, so a rate cut would be a big surprise. Despite pressure from US President Donald Trump on the Fed and its Chairman Jerome Powell to cut interest rates, it seems that the Fed will not give in to any political demands and will keep rates steady while waiting for the impact of tariffs on the US economy and inflation.
Source: FXStreet
