Gold prices continued to face downward pressure during Asian trade on Wednesday, slipping below the US$3,300 mark as investors monitored trade policy developments from U.S. President Donald Trump and the release of the Federal Reserve’s June meeting minutes.
By 3:35 pm AEST (5:35 am GMT) spot gold prices were down by $8.40 or 0.3% to US$3,292.65 per ounce.
Traders have grown cautious amid optimism around potential U.S. trade deals, and a hawkish tilt in Fed expectations.
ANZ analysts noted: “Treasury yields and the USD rose, putting pressure on gold, a non-interest-bearing asset. Nevertheless, the precious metal remains well supported by central banks. They are likely to continue adding gold to their reserves as they diversify away from the USD.”
Gold also found little inspiration from mixed inflation data out of China. June’s consumer price index (CPI) edged up by 0.1% year-on-year, recovering slightly from a 0.1% decline in May. However, the producer price index (PPI) declined more sharply than expected, falling 3.6% compared to forecasts of a 3.2% drop.
Meanwhile, market sentiment remains sensitive to evolving trade headlines. Trump extended the reciprocal tariff deadline to 1 August, providing a temporary reprieve for several trade partners.
However, he also reignited trade war concerns by threatening new tariffs ranging from 25% to 40% on 12 countries, along with an additional 10% tariff on all BRICS nations - including India - effective the same date.
Adding to the pressure, Trump confirmed a 50% tariff on imported copper. He also said on Truth Social that he would issue announcements Wednesday regarding a further 7 countries, though it was unclear whether they would be new deals or fresh tariff actions.
The broader market is also watching the Federal Reserve for signals on interest rate direction. With uncertainty surrounding Trump’s tariff agenda casting a shadow over the economic outlook, traders will closely analyse the Fed’s June policy meeting minutes, due later Wednesday.
Rate cut expectations have been tempered in recent days. According to the CME Group FedWatch Tool, markets now see a 62.9% chance of a rate cut in September, down from 73% in the previous week.
