Investing.com -- Gold prices fell Wednesday, dropping further from record highs after U.S. President Donald Trump touted potentially lower trade tariffs on China, while also backtracking from his tirade against the Federal Reserve.
At 10:05 ET (14:05 GMT), spot gold fell 3.2% to $3,273.69 an ounce, while gold futures expiring in June fell 4% to $3,283.40.
Spot prices reached a peak of $3,500.33/oz on Tuesday.
The yellow metal clocked heavy overnight losses on Tuesday as investors pulled out of havens and piled into a risk-on rally in equities, following the president’s comments. A mild rebound in the dollar also weighed on gold.
Gold slides from peak as Trump talks lower China tariffs
Risk appetite has improved, to the detriment of safe haven gold, after Trump said he did see an eventual reduction in steep trade duties on China, although this was largely contingent on China coming to the negotiating table.
Trump’s comments came after a report showed Treasury Secretary Scott Bessent viewing an ongoing U.S.-China trade war as “unsustainable,” and that he expected a de-escalation soon.
The WSJ reported Wednesday that the Trump administration is considering slashing its steep tariffs on Chinese imports—in some cases by more than half—in a bid to de-escalate tensions with Beijing.
Trump has imposed 145% tariffs on China, drawing retaliatory tariffs of 125% from Beijing.
Trump also backtracked on his recent criticism of the Fed, stating that he did not plan to fire Chair Jerome Powell. The President had engaged in an extended social media tirade against Powell, calling on him to lower interest rates or risk a U.S. recession.
Elsewhere, platinum futures rose 1.5% to $976.60/oz, while silver futures traded largely unchanged at $32.905/oz.
Among industrial metals, copper prices were mixed as traders digested hopes of improving economic conditions in top importer China, although a prolonged U.S. trade war is likely to weigh.
Benchmark copper futures on the London Metal Exchange rose 0.6% to $9,445.0 a ton, while U.S. copper futures fell 0.2% to $4.8668 a pound.
"Copper smelters in China boosted output to a record high in March. This is despite record-low processing fees, partly driven by rising prices for by-products including gold and sulphuric acid. Production of refined copper rose 8.6% in March from a year earlier to 1.25 million tonnes, according to China’s National Bureau of Statistics. In the first quarter, China’s total output of refined copper was 3.54 million tonnes, up 5% from 2024," said analysts at ING, in a note.
Gold to hit $4,000/oz by Q2 2026 - JP Morgan
JP Morgan expects gold to cross $4,000/oz by mid-2026, citing increased expectations of a recession amid U.S. tariffs, a trade war, and sustained central bank demand.
JPMorgan’s forecast comes as spot gold reached $3,500/oz for the first time this week, as safe haven demand for the yellow metal remained strong. Recent declines in the dollar and Treasury yields also showed markets were largely biased towards gold as a haven.
But on the other hand, JPMorgan warned that a potential bear case for gold could be an unexpected drop-off in central bank demand. Resilience in the U.S. economy could also undermine safe haven demand.
(Ambar Warrick contributed to his article.)