Spot gold ended lower on Tuesday, marking its fourth straight day of declines, as safe-haven demand continued to weaken and uncertainty over monetary policy kept the market in a holding pattern. According to Kitco, gold prices briefly climbed during early Asian trading to $3,257.80 per ounce before coming under pressure and retreating. It closed at $3,231.08 in New York, down about 0.5% for the session. The intraday low fell to $3,173.40, hovering near a key technical support zone.
The market mood has turned more risk-on, driven by signs of improving U.S.-China relations. The two countries recently reached a provisional agreement to pause new tariffs for 90 days, which boosted global equity market sentiment and diminished the appeal of gold as a safe-haven asset. Investors are redirecting capital into riskier assets, putting downward pressure on gold prices.
On the macro front, the latest U.S. inflation report showed signs of easing. April’s Consumer Price Index rose 3.2% year-over-year, while core inflation held steady at 2.8%, slightly below market expectations. The softer data adds some room for the Federal Reserve to consider rate cuts. However, with the labor market still showing strength, investors remain cautious about when the Fed might actually ease policy. Interest rate futures tracked by the CME suggest that rate cuts are more likely after September, with the market pricing in about 50 basis points of total easing this year.
From a technical perspective, gold has been undergoing a correction since hitting a record high of $3,500 last month. Prices are now fluctuating in a range between $3,200 and $3,300. If support at $3,160 fails to hold, a further decline toward $3,057 is possible, which corresponds to the 50% retracement of the rally from March.
Looking ahead, investors are awaiting Thursday’s release of U.S. Producer Price Index data, as well as comments from Federal Reserve Chair Jerome Powell for clues on the direction of monetary policy. Geopolitical developments, particularly in the Middle East, are also being watched closely as potential catalysts for a rebound in gold prices.