Gold prices experienced a decline on Wednesday, retreating from Tuesday’s record high as safe-haven demand diminished. Easing tensions between the United States and China contributed to a risk-on sentiment, exerting downward pressure on the XAU/USD pair. However, losses appear constrained by a hesitant US Dollar, influenced by expectations of Federal Reserve rate cuts. Optimism surrounding a potential resolution to the US-China trade dispute, signaled by US administration officials, further dampened demand for the precious metal. President Trump’s softened stance on Federal Reserve Chair Jerome Powell and indications from Russian President Putin regarding potential talks with his Ukrainian counterpart also bolstered investor confidence, reducing the appeal of safe-haven assets. The US Dollar’s attempted recovery from multi-year lows faltered amid concerns about the US economic outlook, exacerbated by President Trump’s tariff policies. Expectations of renewed Federal Reserve rate cuts are acting as a headwind for the Greenback, providing support for Gold prices. Investors await the release of global flash PMIs for further insights into the global economic condition and potential short-term market catalysts.
