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Gold prices deepen losses, falling below $3,300
Gold prices fell about 3% on Wednesday after US President Donald Trump backed down from his threat to fire Federal Reserve Chairman Jerome Powell, expressing optimism about a trade deal with China, which negatively impacted the yellow metal's safe-haven appeal.
Spot gold fell $102, or 3%, to $3,279.27 per ounce at 3:42 p.m. GMT.
U.S. gold futures fell $132, or 3.86%, to $3,287.50.
Kelvin Wong, senior market analyst for Asia-Pacific at OANDA, told Reuters that Trump's hints about resuming negotiations with China and his retreat from his harsh rhetoric toward Powell put pressure on gold prices.
Dollar and Stocks Rise Again
The dollar and US stocks rose again after Trump's remarks, in which he softened his threats against the Federal Reserve, days after criticizing it for not cutting interest rates. A stronger dollar makes gold more expensive for holders of other currencies.
Trump expressed optimism about the possibility of a "significant" reduction in tariffs on Chinese imports if a trade agreement is reached, but stressed that the agreement would not reduce tariffs to "zero."
For his part, US Treasury Secretary Scott Besant said that trade tensions between the United States and China could ease, but negotiations with Beijing have not yet begun, expecting them to be "exhausting."
Gold Declines After Record High
Gold hit a new record high on Tuesday, its 28th of the year, reaching $3,500 per ounce for the first time in history.
JP Morgan believes that gold prices could exceed $4,000 per ounce next year, given the ongoing economic and trade challenges.
As for other precious metals, silver rose 0.5% to $32.67 per ounce, while platinum fell 0.2% to $956.53, and palladium fell 0.2% to $933.72.
