Gold slips on US-China trade talk hopes; traders eye Fed policy

Gold prices fell on Wednesday as optimism over potential US-China trade talks weakened demand for safe-haven assets, while investors braced for the Federal Reserve’s policy meeting later in the day.

FUNDAMENTALS

* Spot gold lost 1.3% to USD 3,386.36 an ounce as of 0024 GMT. The metal had risen nearly 3% in the previous session.

* US gold futures fell 0.8% to USD 3,395.20.

* US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official in Switzerland this week, US officials said, in what could be the first step toward resolving a trade war disrupting the global economy.

* The US and China imposed tit-for-tat tariffs on each other last month, triggering a trade war that fuelled fears of a global recession.

* On Tuesday, US President Donald Trump said he and top administration officials will review potential trade deals over the next two weeks to decide which ones to accept.

* The market’s focus will be on the Federal Open Market Committee (FOMC) meeting later in the day, where the US central bank is expected to hold interest rates steady. The Fed has held its policy rate in the 4.25%-4.50% range since last December.

* Fed Chair Jerome Powell’s remarks are awaited for clues into the potential timing of future interest rate cuts.

* Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-interest rate environment.

* Spot silver eased 0.6% to USD 33.03 an ounce, platinum fell 0.4% to USD 980.95, and palladium lost 0.5% to USD 969.75.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy)