Gold prices tumble as Trump's calmer tone eases market fears
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Güneşli
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Gold prices experienced a significant retreat on Wednesday, reversing a recent surge to record highs, as U.S. President Donald Trump adopted a more conciliatory stance towards both China and the Federal Reserve.
Spot gold prices fell by 2.1% to $3,310.29 per ounce as of 08:11 GMT, retreating from the record high of $3,500.05 reached in the previous session. U.S. gold futures saw an even steeper decline, dropping 2.9% to $3,321.30.
"The comments of President Trump, including his softer stance towards the Fed chairman as well as his remarks on China, eased some market concerns and weighed on the yellow metal," explained Giovanni Staunovo, a commodities analyst at UBS. Despite the day's decline, Staunovo maintained a bullish outlook, predicting gold prices to reach $3,500 per ounce in the coming months.
Trump's shift in tone included a seeming reversal of threats to dismiss Federal Reserve Chair Jerome Powell, after days of escalating criticism over interest rate policies. He also expressed optimism regarding potential progress in trade negotiations with China, hinting at possible tariff reductions. However, he cautioned that "If they don’t make a deal, we’ll set the deal."
Despite the President’s more optimistic outlook, underlying economic concerns persist. The International Monetary Fund (IMF) recently downgraded its global and U.S. economic growth forecasts for 2025, attributing the revision largely to the impact of Trump's tariff policies.
Gold, traditionally considered a safe-haven asset, had surged over 26% since the start of 2025, driven by geopolitical and financial uncertainties. Analysts at JP Morgan anticipate this upward trend to continue, projecting gold prices to surpass $4,000 per ounce by 2026. However, they also forecast short-term volatility in silver due to industrial demand uncertainties, with a rebound expected later in 2025, targeting $39/oz by year-end.
In the broader precious metals market, spot silver experienced a gain of 1%, reaching $32.85 per ounce, while platinum also saw an upward movement, climbing 0.6% to $964.35 per ounce. In contrast, palladium exhibited stability, holding steady at $935.48 per ounce.
The precious metals market is expected to remain highly sensitive to political and economic developments in the coming months. (ILKHA)
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