Gold prices eased to around $3,310 per ounce on Wednesday, continuing their retreat after briefly hitting a record high of $3,500 in the previous session.
Gold retreats further
The decline in gold prices came as optimism grew over easing US-China trade tensions and reduced concerns about the independence of the Federal Reserve. On Tuesday, Treasury Secretary Scott Bessent expressed confidence that a de-escalation in the trade conflict with China was imminent, describing the prolonged tariff standoff as "unsustainable." His remarks suggested that a resolution could be on the horizon, leading to a more favorable outlook for global economic stability and, by extension, a decrease in demand for safe-haven assets like gold.
In parallel, President Donald Trump backed away from his earlier threats to remove Federal Reserve Chair Jerome Powell, alleviating fears that political interference would undermine the central bank’s independence. This shift in tone came after days of intensified criticism from Trump regarding the Fed’s reluctance to cut interest rates, which had raised concerns about potential instability within US monetary policy. With both of these developments helping to ease uncertainties, investor sentiment improved, driving gold prices lower as demand for riskier assets grew.
Gold remains up by 30% year-to-date
However, despite the recent pullback, gold remains up roughly 30% year-to-date, reflecting its strong performance in the face of ongoing global uncertainties. While the improved sentiment has diminished some of gold's traditional safe-haven appeal, the precious metal continues to benefit from long-term concerns about global economic health, including potential trade disruptions, inflationary pressures, and geopolitical risks. Analysts remain divided on whether the pullback is temporary or whether gold will resume its upward trajectory as underlying economic challenges persist. The balance between risk-on optimism and lingering macroeconomic risks will likely continue to influence gold’s price action in the coming weeks.
