Gold prices fell in Asian trade on Wednesday, pulling back marginally from strong gains this week after a trade deal between the U.S. and Japan boosted risk appetite and hurt haven demand.
But the yellow metal was still sitting on strong gains this week, and was less than $100 away from an April record high, as markets still remained uncertain over U.S. President Donald Trump’s trade tariffs, which will take effect from August 1.
Caution before a closely watched Federal Reserve meeting also buoyed gold, while pulling the dollar back from two weeks of gains. Broader metal prices were largely rangebound on Wednesday.
Spot gold fell 0.3% to $3,421.15 an ounce, while gold futures fell 0.3% to $3,434.75/oz by 01:20 ET (05:20 GMT).
US-Japan trade deal hurts safe havens Gold and other safe havens marked losses on Wednesday after Trump announced a trade deal with Japan, which will see the country subject to a 15% tariff.
The 15% figure is lower than the 25% levy threatened by Trump earlier, with lower tariffs on Japan’s automobile exports also offering some relief. Japanese stock markets rallied to one-year highs on Wednesday.
But Washington signaled that Trump’s 50% tariffs on steel and aluminum will remain. Optimism over the deal was also clouded by heightened political uncertainty in Japan, amid growing speculation that Prime Minister Shigeru Ishiba will resign after his party suffered a crushing defeat in the upper house elections.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Gold, metals clock strong gains this week on trade, Fed jitters Despite Wednesday’s decline, gold was sitting on a 2.2% gain so far this week, especially as markets remained on edge over more U.S. trade deals and an upcoming Fed meeting.
Gold was also trading within sight of a $3,500/oz record high hit in April.
Other precious metals also logged gains this week, with spot platinum and spot silver trading up between 1% and 3%. Both metals clocked mild declines on Wednesday.
Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,907.75 a ton, while COMEX copper futures rose 0.3% to $5.7855 a pound.
While the U.S.-Japan trade deal does highlight some progress in U.S. trade policy, markets remained largely on edge over a brewing trade war with the European Union. The bloc was seen preparing retaliatory tariffs against the U.S. after Washington pushed for a higher tariff level than EU leaders were demanding.
Metal markets also took some support from a pullback in the dollar, as anticipation of next week’s Fed meeting weighed on the greenback. The Fed is widely expected to leave interest rates unchanged, despite mounting pressure from Washington to ease.
