Gold Prices Slide as US-China Trade Talks Lift Risk Sentiment

Gold prices dropped in Asian trading on Wednesday, weighed down by improved risk appetite following news of upcoming high-level trade talks between the U.S. and China. Spot gold slipped 1.3% to $3,384.71 an ounce, while June gold futures declined 0.9% to $3,392.74/oz.

The announcement of U.S.-China negotiations in Switzerland spurred gains in Asian equities and Wall Street futures, reducing demand for safe-haven assets like gold. Despite ongoing geopolitical tensions, including escalating military actions between India and Pakistan, gold failed to attract strong haven inflows, reflecting broader market optimism.

Earlier in the week, gold had edged higher, nearing record levels amid uncertainty surrounding global trade. However, optimism over renewed diplomatic efforts reversed that momentum. Investors remain cautious about the outcome of the talks, especially after U.S. President Donald Trump stated he had no plans to sign a trade deal soon. Meanwhile, both countries have imposed steep tariffs exceeding 100%, and recent economic data shows growing pressure on their respective economies.

Other precious metals also weakened. Platinum futures fell 0.5% to $987.40/oz, and silver dropped 0.5% to $33.208/oz. Industrial metals mirrored the decline, with London copper futures down 0.9% at $9,456.50 per ton and U.S. copper futures losing 0.9% to $4.7135 per pound.

The U.S. dollar strengthened ahead of a closely watched Federal Reserve meeting, further pressuring metals. While the Fed is expected to hold rates steady, markets will scrutinize Chair Jerome Powell’s comments for clues on future policy direction, particularly amid growing calls for rate cuts from the White House.

Gold and metals traders remain on edge as macroeconomic uncertainty and currency fluctuations continue to influence commodity pricing.