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Gold prices declined in Asian trading on Wednesday, pressured by diminishing safe-haven demand after the U.S. and China agreed to a temporary tariff truce and U.S. inflation data came in softer than expected.
- Spot gold fell 0.7% to $3,228.95/oz
- Gold futures (June) slipped 0.5% to $3,232.24/oz
(As of 02:53 ET / 06:53 GMT)
Soft CPI and Trade Progress Pressure Bullion
U.S. Consumer Price Index (CPI) data released on Tuesday showed a slower-than-expected pace of inflation, easing concerns over the broader economic impact of elevated tariffs. The data also suggested that tariff-induced inflation may not materialize as strongly as feared, further reducing demand for gold as an inflation hedge.
At the same time, risk appetite improved after Washington and Beijing agreed to lower their respective tariffs — the U.S. reducing its levies on Chinese goods from 145% to 30%, and China cutting its own from 125% to 10% — in a 90-day deescalation period. U.S. President Donald Trump said Tuesday he was open to personally negotiating with Chinese President Xi Jinping to finalize a broader deal.
These developments have cooled demand for safe-haven assets, like gold, as equities and other risk-driven markets rallied on hopes of stabilizing global trade.
While the retreat in inflation may offer the Federal Reserve more flexibility in setting monetary policy, investors remain cautious about the Fed’s next moves. Uncertainty around future rate cuts—typically supportive for gold—has added to the downside pressure on bullion.
The U.S. Dollar Index was largely flat in early Asian trading, offering little support or resistance to gold prices.
Other Precious and Industrial Metals
- Silver futures fell 0.6% to $32.915/oz
- Platinum futures rose 0.5% to $995.45/oz
Copper Edges Higher Amid Trade Optimism
Copper prices ticked higher on Wednesday, with sentiment buoyed by easing U.S.-China trade tensions, which are expected to support industrial demand — particularly in China, the world’s largest consumer of copper.
- LME Copper rose 0.2% to $9,623.65/ton
- COMEX Copper (July) added 0.1% to $4.7125/lb
Traders are now eyeing Thursday’s U.S. Producer Price Index (PPI) report for further clues on inflation and the Fed’s policy outlook. Strong PPI data could renew rate hike concerns, while a weak print may reinforce expectations for easing.
