Gold falls as easing trade tensions dampen appeal; US data in focus
Gold prices dropped on Wednesday, pressured by a firmer dollar and a de-escalation in trade tensions, while investors awaited key US data for cues on the Federal Reserve's rate outlook.
Spot gold was down 0.4% at $3,302.58 an ounce, as of 0430 GMT. US gold futures lost 0.7% to $3,310.70.
The dollar edged 0.1% higher against a basket of currencies, making bullion more expensive for overseas buyers.
There's been a minor recovery in the broad dollar strength, which led to a little bit of retracement in gold, said Nicholas Frappell, global head of institutional markets, ABC Refinery.
US President Donald Trump signed a pair of orders to soften the blow of his auto tariffs on Tuesday, while his trade team touted its first deal with a foreign trading partner.
'Even though the Trump administration is watering down tariffs, they are still high and the confidence in US assets has been shaken, arguably permanently,' Capital.com's financial market analyst Kyle Rodda said.
Bullion, a safeguard against political and financial turmoil, had soared to a record high of $3,500.05 per ounce on April 22 due to global economic uncertainties.
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Market participants will scan economic data, including US personal consumption expenditures, due later in the day, and non-farm payrolls report on Friday to further gauge the impact of the latest tariffs on Fed's interest rate outlook.
'The PCE data is expected to show further moderation in prices and keep the door open for further Fed cuts.
If we get an upside surprise, then those odds may diminish and that could weigh on gold prices,' Rodda said. Traders currently expect the Fed to cut rates by around 95 basis points by the end of the year.
Spot silver fell 0.7% to $32.72 an ounce, platinum eased 0.6% to $971.75 and palladium lost 0.2% to $932.40.
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