Gold prices edged higher on Wednesday, holding just above the US$3,300 support level, as investors weighed fading trade tensions against renewed strength in the United States dollar ahead of the Federal Reserve’s May policy meeting minutes.
By 3:45 pm AEST (5:45 am GMT) spot gold was up by $6.25 or 0.2% to $3,306.77 per ounce.
The precious metal has seen a moderate pullback this week amid a rebound in risk appetite following U.S. President Donald Trump’s decision to delay 50% tariffs on European Union imports from 1 June to 9 July.
The move helped ease concerns in the trade and bond markets, providing relief to the U.S. dollar, which climbed alongside a recovery in U.S. Treasury yields.
ANZ analysts observed: “Haven buying was also subdued after the EU and U.S. signalled a willingness to work towards a trade deal over the next six weeks. It was the first major thaw in their relationship since Trump’s second term began.”
Adding further pressure to gold, upbeat U.S. consumer confidence data released Tuesday bolstered the dollar. The Conference Board reported that its Consumer Confidence Index climbed to 98.0 this month, buoyed by the temporary U.S.-China trade truce.
At the same time, Federal Reserve policymakers continued to signal a cautious approach to interest rate cuts. Minneapolis Fed President Neel Kashkari said Tuesday that he supports the stance to maintain interest rates until there is some more clarity on the impact of higher tariffs on inflation.
Geopolitical tensions remain high, but have yet to provide a meaningful boost to safe-haven gold. Overnight, Russia launched a third consecutive night of drone strikes on Ukraine, killing at least six people.
Despite the heightened geopolitical risks, gold remains under pressure as markets await the Fed’s policy outlook.
