Gold prices fell in Asian trading on Wednesday, retreating from recent all-time highs as market sentiment shifted following U.S. President Donald Trump's unexpected softening on trade tariffs and the Federal Reserve.

• Spot gold dropped 1% to $3,347.54/oz

• Gold futures for June delivery declined 1.8% to $3,356.99/oz

• Prices had peaked at $3,500.33/oz earlier this week

The decline came amid a global risk-on rally that saw investors exit safe-haven assets like gold in favor of equities.

What Triggered the Pullback?

🔻 Trump Eases on China Tariffs

Markets turned optimistic after Trump indicated he was open to eventually lowering tariffs on China, provided Beijing engages in meaningful negotiations. This was a notable shift, given that:

• The U.S. recently slapped 145% tariffs on Chinese imports

• China retaliated with 125% tariffs of its own

Despite the optimism, Beijing has yet to show signs of softening its stance, keeping a layer of uncertainty in the air.

🔄 Trump Softens on Fed Criticism

Adding to the sentiment shift, Trump also dialed back his criticism of Federal Reserve Chair Jerome Powell, clarifying that he had no intention of removing Powell from his position—after earlier social media attacks urging interest rate cuts.

This reversal helped boost the U.S. dollar, further pressuring gold prices.

Metals Mixed, Sentiment Still Fragile

While other metals saw modest gains on improved risk appetite, gold's decline was capped by continued geopolitical and economic uncertainties. Investors remain wary of:

• Fluctuating trade dynamics

• Mixed signals from the U.S. administration

• Potential Fed rate moves

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