Gold extends fall as dollar gains, trade tensions ease

Gold prices fell for the second straight session on Wednesday, hurt by a stronger dollar and signs of de-escalation in US-China trade tensions, while focus was also on a slew of U.S. economic data due this week.

Spot gold was down 1.1% at $3,279.51 an ounce as of 1145 GMT. But bullion was on track to log its fourth consecutive monthly gain, up 5% so far in April.

“The market is currently experiencing high volatility as the two-way flows compete. In short, it looks as if gold may be entering a well-earned period of consolidation,” said Ross Norman, an independent analyst.

The dollar index rose 0.1% against its rivals, making bullion more expensive for other currency holders.

“Gold prices are lower in more stable conditions as the market took stock of what appeared to be a de-escalation of the U.S.-led trade war that has rattled the financial markets in recent weeks,” Frank Watson, market analyst at Kinesis Money, said in a note.

“That said, gold’s reluctance to move much lower can be taken as a sign that the financial markets are still on edge amid uncertainty over U.S. trade policies and their ultimate impact on the wider global economy.”

U.S. President Donald Trump signed a pair of orders to soften the blow of his auto tariffs on Tuesday, while his trade team touted its first deal with a foreign trading partner.

Bullion, a safeguard against political and financial turmoil, last soared to a record high of $3,500.05 per ounce on April 22 as investors sought refuge from global economic turmoil.

Investors will turn their focus to a series of U.S. economic data, including U.S. personal consumption expenditures (PCE) later in the day and the non-farm payrolls report on Friday, which could shed more light on the Federal Reserve’s interest rate outlook.

Elsewhere, spot silver dipped 2.2% to $32.24 an ounce, platinum fell 1.1% to $966.77 and palladium lost 0.5% to $929.85.