Gold extends slide as US-China tensions ease

Gold prices extended their decline on Wednesday as easing US-China trade tensions and profit-taking following a record rally pressured the market ahead of key U.S. inflation data due later this week.

Spot gold fell 0.4 percent to $4,109.19 per ounce as of 0236 GMT, after tumbling more than 5 percent on Tuesday in its sharpest single-day drop since August 2020. U.S. gold futures for December delivery rose 0.4 percent to $4,124.10 per ounce.

“Easing trade tensions between the U.S. and China was the snowflake that caused the avalanche and reversed gold’s momentum trade,” said Matt Simpson, senior analyst at StoneX. “This is simply a technical repositioning in a market that needed a pullback after an extended rally above $4,000. I suspect the worst of the volatility is over, as buyers are likely to step in on dips.”

U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two leaders meet next week in South Korea, downplaying the risk of a confrontation over Taiwan. Meanwhile, India’s Mint newspaper reported that New Delhi and Washington are close to finalizing a long-delayed trade agreement that would reduce U.S. tariffs on Indian imports to 15–16 percent from 50 percent.

Gold has surged about 56 percent so far this year, hitting an all-time high of $4,381.21 on Monday, driven by geopolitical uncertainty, expectations of interest rate cuts, and continued central bank purchases.

Investors are now focused on Friday’s release of the September U.S. consumer price index report for further guidance on the Federal Reserve’s rate-cut trajectory. The report was delayed due to the recent U.S. government shutdown.

According to a Reuters poll, the Fed is expected to cut its key interest rate by 25 basis points next week and again in December, though economists remain divided on the outlook for 2026.

Among other precious metals, spot silver rose 0.1 percent to $48.82 per ounce, platinum slipped 1.5 percent to $1,528.15, and palladium gained 0.7 percent to $1,418.09.