Gold Prices Fall As Safe-Haven Demand Fades
Gold prices fell in Asian trading on Wednesday (05/14) as bullion’s safe-haven appeal was dented by easing U.S.-China trade tensions, while weaker-than-expected U.S. inflation figures further weighed on prices.
Falling consumer prices dampened demand for traditional safe-haven assets such as bullion, which is often used to preserve value during times of high inflation.Spot gold was down 0.7% at $3,228.95 an ounce by 02:53 AM ET (06:53 GMT), while June gold futures were down 0.5% at $3,232.24 an ounce.
U.S. consumer price index data released Tuesday was lower than expected, easing concerns about inflationary pressures from trade tariffs.On Monday, the U.S. and China agreed to temporarily ease high tariffs, cutting them to 30% and 10% respectively for 90 days, easing fears of a global recession and boosting risk sentiment.
US President Donald Trump said on Tuesday that he may meet privately with Chinese President Xi Jinping to work out the final terms of a trade deal.While the change could give the Federal Reserve greater flexibility on monetary policy, lingering concerns about a potential rebound in inflation caused by tariffs are keeping markets cautious.
The resulting uncertainty over the Fed’s interest rate trajectory is weighing on gold prices, which typically benefit from lower interest rates due to reduced opportunity costs.
The US Dollar Index was largely unchanged in Asian trading on Tuesday.
Among other precious metals, Silver Futures fell 0.6% to $32.915 an ounce, while Platinum Futures rose 0.5% to $995.45 an ounce.
Source: Investing.com
