Gold Prices Dip as US Dollar Strengthens and Tariff Tensions Ease
Gold prices fell on Wednesday, weighed down by a stronger US dollar and signs of easing trade tensions, as investors await key US economic data that could shape the Federal Reserve’s next move on interest rates. Spot gold fell 0.4% to $3,302.58/oz by 4:30am GMT, while US gold futures declined 0.7% to $3,310.70/oz.
The US dollar index gained 0.1% against a basket of major currencies, making gold more expensive for holders of other currencies and applying downward pressure on bullion.
“There was a minor recovery in broad dollar strength, which led to a little bit of retracement in gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
The decline follows a recent rally that saw gold prices reach an all-time high of $3,500.05/ounce on April 22, driven by global economic uncertainties and market volatility.
The pullback in gold comes after US President Donald Trump signed a pair of executive orders aimed at easing the impact of auto tariffs. Meanwhile, the US trade team announced its first agreement with a foreign partner since the new tariff wave began.
“Even though the Trump administration is watering down tariffs, they are still high, and the confidence in US assets has been shaken — arguably permanently,” said Kyle Rodda, market analyst at Capital.com.
Investors now await the release of key data points, including the US Personal Consumption Expenditures (PCE) price index later today and the nonfarm payrolls report on Friday.
“The PCE data is expected to show further moderation in prices and keep the door open for further Fed cuts,” Rodda added. “If we get an upside surprise, then those odds may diminish and that could weigh on gold prices.”
Markets currently anticipate a total of 95 basis points in Fed rate cuts by the end of the year.
- Silver fell 0.7% to $32.72/oz
- Platinum dropped 0.6% to $971.75/oz
- Palladium slipped 0.2% to $932.40/oz
