Gold slips amid easing US-China trade tension
Gold fell on Wednesday as de-escalation in US-China trade tension weakened safe-haven demand, while markets eyed another set of inflation data to assess the Federal Reserve’s policy path.
Spot gold fell 0.7% to $3,226.11/oz by 4.30am GMT. US gold futures eased 0.6% to $3,229.50.
“Positive developments in the US trade policy [are] diminishing the appeal of gold in the short term,” Capital.com financial market analyst Kyle Rodda said.
“I think that if we see continued progress in trade negotiations and deals being done between the US and its trading partners, gold can pull back further; $3,200 is a pretty critical level of support.”
The US will cut the “de minimis” tariff for low-value shipments from China to 30%, according to a White House executive order and industry experts, further de-escalating a potentially damaging trade war between the world's two largest economies.
On Monday, US President Donald Trump said he did not expect tariffs on Chinese imports to return to 145% after the 90-day pause, adding that he believed Washington and Beijing will had a deal.
Meanwhile, the US labour department said the consumer price index (CPI) increased 0.2% in April, while economists polled by Reuters expected a 0.3% rise after a 0.1% decline in March.
Traders await the producer price index (PPI) data, due on Thursday, for cues about the Fed’s interest rate trajectory. The market is expecting 53 basis points of rate cuts this year, starting in September.
Gold, traditionally viewed as a hedge against inflation, also tends to thrive in a low-interest rate environment.
On Tuesday, Trump reiterated his call for the Fed to lower rates, saying prices for petrol, groceries and “practically everything else” were down.
Spot silver eased 0.8% to $32.61/oz, platinum was steady at $988.65 and palladium lost 0.9% to $948.60.