Gold prices retreated during Asian trade on Wednesday, slipping below the US$3,400 mark as traders booked profits ahead of the United States Federal Reserve’s policy decision, while risk sentiment returned amid signs of progress in U.S.-China trade talks.
At 3:35 pm AEST (5:35 am GMT), spot gold was down US$47.78, or 1.4%, to trade at US$3,382.04 per ounce, correcting from a two-week peak of US$3,435 hit earlier in the session.
The pullback followed news that U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will travel to Geneva later this week for negotiations with Chinese Vice Premier He Lifeng.
Scheduled for 9-12 May, the talks are aimed at easing escalating trade tensions between the world’s two largest economies.
The announcement lifted sentiment in Asian equity markets, denting safe-haven flows to gold. The U.S. dollar also gained ground on renewed trade optimism, further pressuring the precious metal.
Attention now turns to the Federal Reserve, which is widely expected to hold interest rates steady later today. With a no-change decision fully priced in, investors will scrutinise Fed Chair Jerome Powell’s post-meeting press conference for guidance on the outlook for rate cuts.
In the background, escalating geopolitical risks could cushion deeper gold losses. Israel’s security cabinet has approved an expanded military offensive in Gaza, while tensions flared in South Asia after India launched missile strikes on alleged terrorist targets in Pakistan and Pakistan-Occupied Kashmir in retaliation for an earlier attack in Jammu & Kashmir.
