Gold Down as Traders Assess Trade Talks, Fed Outlook
Gold fell slightly for the second time in three days as traders assessed weaker-than-expected U.S. inflation figures for April and easing trade tensions with China.
Bullion fell as much as 0.9% before paring some losses, with reports of U.S.-South Korea talks on currency policy causing the dollar to decline. Gold sold off sharply on Monday when a truce in trade talks between Washington and Beijing prompted a reallocation out of havens.
“The U.S.-China tariff rate surprised materially to the downside, which eased investor concerns about trade-driven growth risks,” said Justin Lin, an analyst at Global X ETFs. “Capital is likely flowing out of defensive sectors and gold.” The breakthrough — following a weekend meeting in Switzerland — revived investor appetite for riskier assets, fueling a rally that has erased the S&P 500’s losses in 2025.
The precious metal remains about a fifth higher this year, after hitting a record high above $3,500 an ounce last month as trade tensions escalated. Investors worry that the confrontation could trigger a slowdown in growth or a recession, as well as faster inflation.
On Tuesday, April price growth for the U.S. was weaker than expected, suggesting little urgency so far by companies to pass on the costs of higher tariffs to consumers. That could strengthen the case for more interest-rate cuts from the Federal Reserve this year, which tends to make non-interest-bearing bullion more attractive to investors.
Spot gold was trading 0.6% lower at $3,232.50 an ounce at 10:05 a.m. in London, after rising 0.4% on Tuesday. The Bloomberg Dollar Spot Index fell 0.4%. Silver was slightly lower, while platinum and palladium rose.
Source: Bloomberg
