Gold prices fell on Wednesday as U.S. President Donald Trump retracted his threats to dismiss Federal Reserve Chair Jerome Powell and expressed optimism for a trade deal with China, diminishing bullion’s safe-haven appeal.Â
In Dubai, gold rates saw significant declines, with 24-carat gold dropping AED12.00 in the last 24 hours to AED404.25. Likewise, 22-carat gold fell to AED374.50. Additionally, 21-carat gold saw a reduction of AED10.50, bringing its price to AED359.00, while 18-carat gold decreased by AED9.00, now priced at AED307.75.
Spot gold dropped by 0.7 percent to $3,357.11 an ounce by 02:56 GMT, while U.S. gold futures fell 1.5 percent to $3,366.80. Currently, spot gold stands at $3,339.32.
The hint of U.S.-China negotiations and Trump’s withdrawal of his threat to remove Powell “caused the sell-off in gold price to hit a kind of a very extreme oversold level in the short-term perspective here,” Reuters reported, citing Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
U.S. stocks and the dollar rebounded after Trump, on Tuesday, withdrew his threats to fire Powell following days of mounting criticism of the central bank chief for not cutting interest rates. A stronger dollar makes gold more expensive for overseas buyers.
Trump’s optimism on trade deal
Trump also expressed optimism that a trade deal with China could “substantially” reduce tariffs on Chinese goods, hinting that the final deal will not “be anywhere near” current tariff rates. U.S. Treasury Secretary Scott Bessent stated he believes there will be a de-escalation in U.S.-China trade tensions, although negotiations with Beijing have not yet commenced and would be a “slog.”
Read more: Dubai gold prices up AED10.75, global rates near record high of $3,481
Potential upside movement for gold prices
“There is no form of a bullish exhaustion yet from the upper bond level so there could still be potential movement on the upside for the gold,” OANDA’s Wong noted. Fed Bank of Minnesota President Neel Kashkari remarked that it is too soon to determine how short-term borrowing costs may need to be adjusted for Trump’s tariffs and their expected impact on inflation and the economy.
Gold, regarded as a hedge against global uncertainty and inflation, reached its 28th record high this year on Tuesday, surging to $3,500 for the first time. JP Morgan forecasts that gold prices will cross the $4,000-per-ounce milestone next year.
Spot silver rose 0.5 percent to $32.67 an ounce, platinum eased 0.2 percent to $956.53, and palladium lost 0.2 percent to $933.72.
