Investing.com-- Gold prices fell in Asian trading on Wednesday as bullion’s safe-haven appeal took a hit from easing U.S.-China trade tensions, while a softer-than-expected U.S. inflation reading further exerted downward pressure.
Cooling consumer prices diminish demand for traditional safe-haven assets like gold, which are often used to preserve value during high inflation.
As of 02:53 ET (06:53 GMT), Spot Gold fell 0.7% to $3,228.95 per ounce, while Gold Futures expiring in June declined 0.5% to $3,232.24 an ounce.
Gold slips on soft CPI data, US-China trade thaw
U.S. consumer price index data released Tuesday came in softer than expected, easing worries about inflationary pressure from trade tariffs.
On Monday, the U.S. and China agreed to temporarily scale back steep tariffs, cutting them to 30% and 10% respectively for 90 days, alleviating global recession fears and boosting risk sentiment.
U.S. President Donald Trump said on Tuesday that he might personally engage with Chinese President Xi Jinping to work out the final terms of a trade deal.
While these shifts could offer the Federal Reserve greater flexibility on monetary policy, lingering concerns about a potential tariff-induced inflation rebound kept markets cautious.
The resulting uncertainty over the Fed’s rate trajectory weighed on gold prices, which typically benefit from lower interest rates due to reduced opportunity costs.
The US Dollar Index was largely unchanged in Asian trading on Tuesday.
Among other precious metals, Silver Futures fell 0.6% to $32.915 an ounce, while Platinum Futures rose 0.5% to $995.45 an ounce.
Copper prices edge higher, US PPI data awaited
Copper prices edged higher on Wednesday as investors were hopeful that easing trade tensions for the world’s largest copper importer could support the demand outlook for industrial metals.
Losses were limited as traders turned cautious ahead of the upcoming U.S. Producer Price Index (PPI) data due on Thursday, which is expected to offer further insight into inflation trends and the broader health of the U.S. economy.
Benchmark Copper Futures on the London Metal Exchange edged 0.2% higher to $9,623.65 a ton, while Copper Futures expiring in July gained 0.1% to $4.7125 a pound.