Gold prices steadied in Asian trade on Wednesday after extending a dramatic sell-off earlier in the session, as easing U.S.-China trade tensions and expectations of progress in global trade talks dampened bullion’s safe-haven demand.
Investors also took profits following a strong rally earlier this month, while attention turned to key U.S. inflation data due later in the week.
Spot Gold was last up 0.1% at $4,127.95 per ounce as of 00:21 ET (04:21 GMT), recovering slightly after sliding to as low as $4,003.39/oz earlier in the day. U.S. Gold Futures rose 0.9% to $4,144.51/oz.
The yellow metal slumped more than 5% on Tuesday, marking its steepest one-day decline since 2020. Prices had surged to record highs of $4,381.21/oz earlier this week, buoyed by geopolitical concerns and expectations of U.S. monetary easing.
Gold holds sharp losses amid trade optimism The retreat comes after comments from U.S. President Donald Trump, who said an upcoming meeting with Chinese President Xi Jinping could yield a “good deal” on trade, although he conceded that the talks “may not happen.”
His remarks helped lift market sentiment and curbed appetite for traditional safe-haven assets such as gold.
Further easing trade tensions, India’s Mint newspaper reported that Washington and New Delhi are close to finalizing a trade agreement that would cut U.S. tariffs on Indian goods to around 15-16% from the current 50%, a move seen as boosting bilateral economic ties and global risk appetite.
"The catalyst appears to be profit-taking in a market that has been hugely overbought in recent weeks," ING analysts said in a note, adding that "clearly, market participants were getting increasingly nervous over the sustainability of the uptrend."
Investors remained cautious ahead of the U.S. consumer price index (CPI) report due on Friday, which is expected to offer crucial guidance ahead of the Federal Reserve’s interest rate decision next week.
The ongoing U.S. government shutdown has raised uncertainty in financial markets, with parts of the economic data calendar disrupted.
Metal markets subdued after declines Other precious and industrial metals also fell in the previous session and traded in tight ranges on Wednesday.
Silver prices rose 0.4% to $48.93/oz after tumbling over 7% in the previous session. Silver Futures rose 1.2% to $48.28/oz, while Platinum Futures fell 0.3% to $1,533.90/oz.
Benchmark Copper Futures on the London Metal Exchange were unchanged at $10,612.95 a ton, while U.S. Copper Futures edged up 0.2% to $4.96 a pound.
