Gold prices declined in Asian trading on Wednesday, pressured by improving US-China trade relations and weaker-than-expected US inflation data. Spot gold dropped 0.7% to $3,228.95 per ounce, while June gold futures fell 0.5% to $3,232.24 per ounce.
The decline follows the release of US Consumer Price Index (CPI) data on Tuesday, which came in below expectations, reducing fears of runaway inflation. Lower inflation readings typically dampen the appeal of gold, a traditional hedge against rising prices.
Market sentiment was further boosted after the US and China agreed on Monday to temporarily reduce tariffs to 30% and 10%, respectively, for a 90-day period. The easing of trade tensions lessened global recession concerns and shifted investor interest toward risk assets. US President Donald Trump also indicated he may personally engage with Chinese President Xi Jinping to finalize a trade deal, adding to optimism.
Despite the positive trade developments, some investors remained cautious, wary of a possible inflation rebound once tariffs are reinstated. This uncertainty over future Federal Reserve rate decisions weighed on bullion, which tends to perform better in low-interest environments due to lower opportunity costs.
The US Dollar Index remained largely flat during Asian trading hours, offering little support for gold prices.
Other precious metals also saw mixed movement. Silver futures declined 0.6% to $32.915 per ounce, while platinum futures gained 0.5% to $995.45 per ounce.
Copper prices inched higher, supported by hopes that trade de-escalation would boost demand from China, the world’s largest copper consumer. Benchmark copper futures on the London Metal Exchange rose 0.2% to $9,623.65 per ton, while July copper futures added 0.1% to $4.7125 per pound, with traders awaiting key US Producer Price Index (PPI) data for further inflation cues.


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