Gold Prices Drop Amid Shrinking Trade-Risk Premium

Gold prices continued to fall in Asian trading on Wednesday following President Trump’s decision to ease auto tariffs and comments from Commerce Secretary Howard Lutnick hinting at a significant upcoming trade deal. These developments have reduced the risk-driven buying that previously pushed bullion to record highs.

• Spot Gold: Down 0.4% at 3,305.10/oz

• June Gold Futures: Down 0.6% at 3,314.94/oz

Even with this dip, gold remains on track for its fourth consecutive monthly gain, with an almost 6% increase in April due to safe-haven demand.

Primary Influencers: Tariff Relief and Fed Expectations

1. Auto Tariff Easing: Trump’s orders now provide tax credits and relief on steel and aluminum used in U S car production, substantially lowering the fear of increased consumer prices.

2. Trade Deal Projections: Lutnick’s hints at a near-term agreement have eased anxieties surrounding the trade conflict, which had previously driven gold prices up.

3. Anticipated U S Economic Data: Investors are keenly awaiting PCE inflation, GDP, and employment data to refine expectations regarding Federal Reserve policy.

Analysts from ING express that prolonged uncertainty in U S-China trade discussions and economic instability could continue to uphold the demand for gold as a safe haven, predicting potential volatility ahead.

Real-Time Insights: Monitoring Gold Indices

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Precious Metals Overview

• Silver Futures: Down 1.3% at 32.855/oz

• Platinum Futures: Unchanged at 979.05/oz

With U S consumer confidence near two-year lows and a decrease in job openings, markets will be closely observing any pivots in Federal guidance that could trigger another round of bullion buying.