Gold prices declined sharply Wednesday as U.S. President Donald Trump signaled a softer approach toward both the Federal Reserve and China trade relations, prompting a wave of profit-taking after bullion hit all-time highs earlier this week.
Spot gold dropped 1.8% to $3,320.85 an ounce in London morning trading, while U.S. gold futures slid 3.2% to $3,309.10. The metal had surged to a record $3,500.05 per ounce just a day earlier, driven by investor anxiety over geopolitical and monetary risks.
"The comments of President Trump, including his softer stance towards the Fed chairman as well as his comments on China, eased some market concerns and weighed on the yellow metal," said Giovanni Staunovo, analyst at UBS.
Trump had recently criticized Federal Reserve Chair Jerome Powell for not cutting interest rates, but this week walked back threats to fire him. The president also expressed renewed optimism for reducing tariffs on Chinese imports, stating Tuesday that duties "will come down substantially but it won't be zero."
The reassurances triggered a shift in investor sentiment, denting safe-haven demand for gold, which has still gained more than 26% year-to-date amid persistent fears of a global economic slowdown and trade disruptions. The International Monetary Fund recently downgraded its growth outlook, citing Trump's tariff policies as a key factor.
Despite the short-term decline, some analysts remain bullish. "We continue to expect gold to rise to $3,500/oz over the coming months," Staunovo added. JPMorgan echoed that sentiment, projecting prices could top $4,000 an ounce in 2026.
Other precious metals posted mixed performances:
- Spot silver climbed 1.2% to $32.92 an ounce, recovering from earlier losses.
- Platinum rose 1% to $967.90.
- Palladium edged up 0.5% to $940.82.
