Gold prices declined on Wednesday as investor sentiment improved, prompting a rebound in the United States Dollar and reducing the metal’s safe-haven appeal ahead of key economic data releases.
By 3:00 pm AEST (5:00 am GMT) spot gold prices were down $36.66 or 1.1% to US$3.344.22 per ounce, recovering slightly from a dip to three-day lows.
The decline follows a week of heightened volatility for gold, which briefly touched new record highs of $3,450 yesterday.
Gains were driven by concerns over the U.S. Federal Reserve's independence after former President Donald Trump’s sharp criticisms of Fed Chair Jerome Powell.
However, sentiment shifted in favour of the U.S. dollar on Tuesday after Treasury Secretary Scott Bessent said he expected a de-escalation in Trump’s trade dispute with China.
The risk-on mood gained further traction after Trump signalled willingness to soften trade measures, stating that the final tariff rate on Chinese goods would be “substantially” lower than the current 145%.
As a result, gold’s downward correction extended into Wednesday's Asian session, with traders now awaiting fresh cues from the upcoming S&P Global preliminary Manufacturing and Services PMI data releases in both Europe and the U.S.
