Gold slips on Trump's Fed backflip, trade hopes

Gold prices dropped on Wednesday after U.S. President Donald Trump hinted at lower tariffs for China and said he has no plans to fire Federal Reserve Chair Jerome Powell.

Spot gold fell 2.1% to $3,310.29 per ounce, as of 0811 GMT, after hitting a record high of $3,500.05 in the previous session.

U.S. gold futures fell 2.9% to $3,321.30.

"The comments of President Trump, including his softer stance towards the Fed chairman as well his comments on China, eased some market concerns and weighed on the yellow metal," said UBS analyst Giovanni Staunovo.

"We continue to expect gold to rise to $3,500/oz over the coming months," Staunovo said.

President Trump backed off from threats to fire Federal Reserve Chair Jerome Powell after days of intensifying criticisms of the central bank chief for not cutting interest rates.

He also expressed optimism that he would make progress with China that would substantially lower tariffs on their imports but also warned that "if they don't make a deal, we'll set the deal."

Meanwhile, the International Monetary Fund on Tuesday slashed its outlook for both U.S. and global growth this year, with Trump's tariffs policy the central reason behind the downgrade.

Gold, traditionally considered a hedge against global instability, has shattered multiple record highs and gained more than 26% since the start of 2025.

JP Morgan said it expects to see gold prices crossing the $4,000-per-ounce milestone next year. It also predicted greater headwinds for silver in the near-term given industrial demand uncertainty, while a "catch-up window" will open over the second half of 2025 with prices set to rise towards $39/oz by 2025-end.

Spot silver rose 1% to $32.85 an ounce.

Platinum was up 0.6% at $964.35 and palladium was steady at $935.48.