Gold price edges lower to $3,245 in Wednesday’s early Asian session.
Improved risk appetite after the US and China slash tariff rates weighs on the Gold price.
Escalating tensions and uncertainty might help limit the Gold’s losses.
The Gold price (XAU/USD) trades in negative territory around $3,245 during the early Asian session on Wednesday. Improved risk appetite in the financial markets due to a tariff deal between the United States (US) and China weighs on the yellow metal, a safe-haven asset. Traders will focus on the Fedspeak later on Wednesday.
The US and China, the world’s two largest economies, agreed to reduce tariffs on each other after two days of negotiations in Geneva, Switzerland. The US lowered tariffs on Chinese imports to 30% from 145%, while China cut tariffs on US imports to 10% from 125%. These positive developments boost market sentiment and undermine the precious metal.
Additionally, easing tensions between India and Pakistan also weighed on the Gold price. The ceasefire remained intact in Jammu and Kashmir and across border towns overnight, following India’s Prime Minister Narendra Modi's stern message to terrorists and Pakistan. Modi said on Monday that India will not tolerate any "nuclear blackmail.” He added that operations against Pakistan have only been paused, and the future will depend on their behavior.
"Gold and silver showed a heavy selloff at the start of the new week amid a trade deal between the US and China in Switzerland. The dollar index and the US bond yields jumped after the announcement of trade deals. The Indo-Pak ceasefire over the weekend also eases safe-haven buying for precious metals," Manoj Kumar Jain of Prithvifinmart Commodity Research observed.
Nonetheless, any signs of escalation between India and Pakistan, along with the economic uncertainty triggered by US President Donald Trump’s tariff policies, could boost the safe-haven flows, benefiting the Gold price.
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