HG MARKETS:

Gold prices continued to decline during Asian trading on Wednesday, following the U.S. administration’s move to ease the impact of auto tariffs. This development, combined with signs of improving trade relations, especially between the U.S. and China, reduced the urgency for safe-haven assets like gold. Investors also remained cautious ahead of key U.S. economic data that could influence the Federal Reserve’s next interest rate decision.

Despite the recent dip, gold remained on track for its fourth consecutive monthly gain, rising nearly 6% in April. As of early morning trading (02:30 ET / 06:30 GMT), spot gold had slipped 0.4% to $3,305.10 per ounce, while gold futures for June delivery declined by 0.6% to $3,314.94 per ounce. The retreat followed announcements from President Trump, who signed two orders offering tax credits and tariff relief for the auto sector, helping to ease market concerns about rising trade barriers.

Positive news on the trade front added further pressure on gold. Commerce Secretary Howard Lutnick suggested that the U.S. was nearing a major trade deal, improving investor sentiment and reducing demand for traditional safe-haven assets. While these developments have pulled gold back from recent record highs, analysts at ING noted that lingering uncertainty in U.S.-China trade negotiations and broader economic instability are likely to keep gold supported in the medium term.

Other precious metals also experienced mixed performance. Silver futures declined sharply by 1.3% to $32.855 an ounce, while platinum futures remained steady at $979.05 an ounce. Meanwhile, investors turned their attention to upcoming U.S. economic indicators, including the PCE price index (the Fed’s preferred inflation gauge), the monthly jobs report, and the Q1 GDP figures—all of which are expected to play a critical role in shaping expectations for future Fed policy moves.

Copper prices took a hit as well, primarily due to disappointing manufacturing data from China, the world’s largest copper importer. China’s official manufacturing PMI dropped to 49.0 in April from 50.5 in March, signaling contraction for the first time since December 2023. The decline was largely blamed on ongoing trade tensions and high U.S. tariffs on Chinese goods. In response, benchmark copper futures on the London Metal Exchange fell 0.5% to $9,379.55 per ton, while May copper futures dropped 1.5% to $4.7875 per pound.