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Gold dropped to a two-week low on signs of potentialtrade-talk progress between the US and several other nations, quelling demandfor a haven despite worries about weakening economies.
Prices slipped as much as 2.1% as investors weighedimproving sentiment on Wall Street after President Donald Trump's traderepresentative said he was nearing an announcement of a first tranche of deals. A report that the US had reachedout to Beijing through various channels added to the optimism.
Bullion is still up 23% this year after hitting a recordabove $3 500 last week before losing some ground. The ascent has been drivenmainly by investors taking refuge in the haven asset as Trump's fast-evolvingtrade policy upended markets and stoked fears of a global slowdown. Speculative demand in China and central-bank buyinghas also supported gains.
Data on Wednesday showed the US economy contracted at thestart of the year for the first time since 2022 due to a monumental pre-tariffsimport surge. That saw traders boost wagers on four quarter-point rate cuts bythe Federal Reserve this year to help prevent a recession. Lower rates aretypically positive for bullion as it pays no interest.
Looking ahead, a key monthly US jobs report due Friday willshed more light on the initial effects from Trump's trade policies on theeconomy.
Spot gold was 2% lower at $3 223.51 an ounce by 10:39 in London. The Bloomberg Dollar Spot Index rose 0.3%. Silver fell by more than1% and platinum edged lower. Palladium was little changed.
