Gold fell for a second day after U.S. President Donald Trump’s remarks on China and the U.S. Federal Reserve eased some market jitters that have fuelled a surge in the precious metal.
Bullion dropped as much as 2.6%, extending declines after soaring to a record above US$3,500 an ounce yesterday.
The metal’s abrupt reversal began on Tuesday as some investors took profits from the steep rally. The selloff continued after Trump backed off from a move to oust Fed Chair Jerome Powell, while also making positive comments about the trade war with China.
The tariff on Chinese goods will “will come down substantially but it won’t be zero,” Trump said Tuesday in Washington.
The precious metals is still up by more than a quarter this year as the trade war, expectations for a global slowdown, and tensions between the Trump administration and the Federal Reserve combine to fan haven demand. Gains have been supported by investors expanding holdings in exchange-traded funds, as well as central-bank buying.
Spot gold fell 1.8% to $3,320.85 an ounce at 9:58 a.m. in London. The Bloomberg Dollar Spot Index was steady. Silver — which had been more than 1% lower in early trading — rose 1.2%. Platinum and palladium advanced.
With assistance from Jack Ryan.
Yihui Xie, Bloomberg News
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