Gold prices dropped to their lowest point in over a month as traders waited for new U.S. economic data.
At the same time, easing tensions between the United States and China made riskier assets more attractive.Spot gold fell by 0.8% to $3,153.09 an ounce early Thursday, the lowest since April 10.
Analysts now focus on $3,150 as a key support level, with a drop to $3,100 possible if it breaks.The U.S.-China trade truce played a major role in reducing demand for safe assets like gold.
Both countries agreed to a 90-day pause and large tariff cuts, which cooled fears of a trade war.Still, global markets remain cautious, unsure of what might happen after the 90-day period ends.Investors are shifting to stocks and other riskier options as they wait for clearer signals.
Meanwhile, traders are closely watching for the U.S. Producer Price Index (PPI) report, due later today.This data could shape the Federal Reserve’s next move on interest rates. Fed policymakers are holding rates steady for now, unsure how trade changes may affect the economy.
Chair Jerome Powell will also speak today, possibly offering more clues on monetary policy. Markets expect the Fed to cut interest rates by 50 basis points before the end of the year.
However, those cuts may now come in October instead of July, as previously expected. Lower interest rates usually support gold, as they reduce the opportunity cost of holding the metal.
For now though, stronger investor interest in other assets is keeping gold prices down.Other precious metals moved in different directions.
Spot silver dropped 0.7% to $31.98 an ounce, following gold’s lead. Platinum, however, rose 0.5% to $980.35, and palladium gained 0.1% to $951.90.Gold remains vulnerable in the short term as traders wait for more data.
Gold prices dropped. U.S. data is coming. Trade news made people buy risky things. Gold may fall more.