Gold closes below $3,200 as risk appetite improves

Gold bars

Gold prices fell at Wednesday’s close as improving investor risk appetite and easing global trade tensions reduced demand for safe-haven assets.

June gold futures dropped 1.8%, or $59.5, to settle at $3,188.3 an ounce.

The decline came after the US and China agreed over the past weekend to mutually reduce tariffs, paving the way for broader negotiations aimed at ending the ongoing trade war between the world’s two largest economies.

This followed a trade agreement reached days earlier between the US and the UK to resolve a long-standing tariff dispute.

These developments eased global trade tensions and prompted investors to move away from safe-haven assets like gold in favor of riskier ones, such as equities.

The precious metal had found some support from official data released yesterday showing US inflation slowed to 2.3% in April, below expectations of 2.4%, reinforcing hopes that the Federal Reserve will continue cutting interest rates.

Investors now await Thursday’s release of US producer price index (PPI) data, which is expected to show a 0.2% monthly increase in April following a 0.40% decline in March.