Gold fell, snapping a two-day advance, after China and the U.S. confirmed upcoming trade talks, easing demand for safe havens.
Spot bullion fell as much as 2.1% after surging nearly 6% in the previous two sessions. Washington and Beijing announced that U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will travel later this week to Switzerland to meet with China’s Vice Premier He Lifeng.
The talks are the first since U.S. President Donald Trump imposed sweeping tariffs against China, raising optimism of a deal between the two biggest economies. However, Beijing said it would not sacrifice its principled stance or international fairness to seek any agreement. The U.S. dollar climbed against most major currencies.
Investors largely shrugged off escalating tensions in South Asia, where India conducted military strikes against Pakistan. Islamabad said it had shot down five Indian jets, and called India’s move an “act of war.” The prospect of a conflict between the nuclear-armed neighbors would typically support gold buying, although this appears to have been canceled out by the prospect easing global trade tensions.
Bullion has surged almost 30% this year, with investors seeking refuge amid widespread market chaos unleashed by Trump’s aggressive trade and geopolitical policies. It hit a record above US$3,500 an ounce in April, before losing some ground in recent weeks. The ascent has also been driven by speculative demand in China and central-bank purchases.
Spot gold fell 1.6% to $3,377.70 an ounce as of 10:47 a.m. in London. The Bloomberg Dollar Spot Index was up 0.3%, snapping a three-day decline of more than 1%. Silver dropped, while platinum and palladium were mostly unchanged.
The U.S. Federal Reserve is due to make an interest-rate decision later on Wednesday, with policymakers expected to stay on hold, despite Trump’s repeated criticism of Chair Jerome Powell for not cutting. Officials have largely emphasized a need to wait and see how trade policies affect the economy. Lower borrowing costs tend to benefit gold, as it doesn’t pay interest.
Sybilla Gross and Jack Ryan, Bloomberg News
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