Gold prices witnessed a slight decline during trading on Wednesday, coinciding with weak demand for the yellow metal due to easing investor fears regarding the trade war between the United States and China (the world's two largest economies).
In addition, markets are awaiting another set of U.S. data for indications regarding the course of monetary policy from the U.S. Federal Reserve this year.
Drop in Spot and Futures Gold Prices After Tariffs Regarding the gold futures markets, contracts fell by 0.37%, equivalent to $12 per ounce, bringing its price to $3235. On the other hand, spot gold prices decreased by 0.62%, equivalent to $20, trading at $3229 per ounce. These declines occurred amid weak demand for gold with the calmness of trade tensions.
Key Factors Affecting Prices The decline in gold prices is attributed to several fundamental factors, the most notable being the positive impacts of the trade agreement between the United States and China, where China confirmed its commitment to easing tariffs. This calmness in the trade war has helped enhance risk appetite in financial markets, thereby reducing demand for the yellow metal.
Furthermore, markets expect that the U.S. Federal Reserve will not implement a sharp rate cut this year, which will alleviate pressure on gold. Goldman Sachs has revised its expectations for the Federal Reserve’s decisions, now predicting only one rate cut during December 2025, down from earlier expectations of three cuts. The bank also indicated two other possibilities for rate cuts in 2026, reflecting decreased urgency for economic support measures at present.
Awaiting U.S. Data and Its Potential Impact on Gold and the Dollar Gold investors are awaiting important U.S. economic data this week, including the Producer Price Index, retail sales, and unemployment claims, which are expected to significantly impact the U.S. Federal Reserve's monetary policy decisions. This data is likely to serve as a key indicator for gold and dollar movements in the upcoming period.
Performance of Other Precious Metals Besides Gold As for other precious metals, silver saw a decline of 0.29%, trading at $32.405 per ounce, while platinum prices rose by 0.28% to $995.00 per ounce, and palladium recorded a slight increase of 0.10%, reaching $956.50 per ounce.
