The spot price of gold dropped by 1.3% due to signs of potential trade talks between the two countries, as investors awaited the U.S. Federal Reserve's upcoming policy decision.

Gold prices fell on Wednesday as optimism over possible U.S.–China trade negotiations reduced demand for safe-haven assets, while investors prepared for the Federal Reserve’s policy announcement expected later in the day.

The spot price of gold declined by 1.3% to $3,383.88 per ounce as of 04:32 GMT (07:32 Kyiv time).

U.S. gold futures also fell by approximately 1%, to $3,391.80.

“Gold appears to be retreating amid a broad-based ‘risk-on’ move in the markets… It’s a pro-cyclical setup that may reflect optimism based on signs that the U.S. and China are entering genuine trade talks,” said Ilya Spivak, Head of Global Macroeconomics at Tastylive.

U.S. Treasury Secretary Scott Bessent and the country’s chief trade negotiator Jamieson Greer are set to meet with China's top economic official He Lifeng in Switzerland this weekend for negotiations.

Last month, both countries imposed reciprocal tariffs, sparking a trade war that heightened fears of a global recession.

On Tuesday, U.S. President Donald Trump stated that he and senior administration officials would review potential trade deals over the next two weeks to decide which ones to move forward with.

Source: Reuters.

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