FX.co ★ Gold Extends Decline

Gold experienced a continued decline, dropping to below $3,310 per ounce on Wednesday. This decrease was influenced by diminishing concerns about the impact of US tariffs, leading to a reduced demand for safe-haven assets like gold. On Tuesday, President Trump signed executive orders that aimed to prevent the introduction of new tariffs on foreign automobiles. These orders also included reducing levies on imported auto parts used within the US manufacturing sector. Additionally, Commerce Secretary Howard Lutnick announced progress in trade negotiations with an undisclosed nation, contributing to the eased tensions.

Despite this decline, gold remains on course for its fourth consecutive monthly gain, experiencing an increase of over 6% within this period. The rally was primarily driven by persistent uncertainties over global trade dynamics—particularly the trade relations between the US and China—and increasing concerns about the US economic outlook. Additional support for the upward trend in gold prices came from strong inflows into gold-backed exchange-traded funds, significant central bank purchases, and indications of speculative demand in China.