Gold slides as prospect of US trade talk deals cuts haven demand

Bullion remains about a quarter higher this year after hitting a record above $3,500 last week before losing some ground.

Gold fell for a third day on signs of potential trade-talk progress between the US and several other nations, quelling demand for havens even as signs of slowdowns have emerged in the largest economies.

Prices shed as much as 1.8 per cent as investors weighed improving sentiment on Wall Street after Donald Trump’s trade representative said he was nearing an announcement of a first tranche of deals. Adding to the optimism, China Central Television said the US had reached out to Beijing through various channels.

Bullion remains about a quarter higher this year after hitting a record above $3,500 last week before losing some ground. The ascent has been driven mainly by investors taking refuge in the haven asset as Trump’s fast-evolving trade policy upended markets and stoked fears of a global slowdown. Speculative demand in China and central-bank buying has also supported gains.

Data on Wednesday showed the US economy contracted at the start of the year for the first time since 2022 due to a monumental pre-tariffs import surge. That saw traders boost bets on US monetary easing, with four quarter-point rate cuts priced in this year by the Federal Reserve to help prevent a recession. Lower rates are typically positive for bullion as it pays no interest.

Looking ahead, a key monthly US jobs report due Friday will shed more light on the initial effects from Trump’s trade policies on the economy.

Spot gold was 1.7 per cent lower at $3,231.84 an ounce at 11:23 a.m. in Singapore. The Bloomberg Dollar Spot Index edged higher. Silver fell by more than 1 per cent, as platinum and palladium edged lower.

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