Market News

BY Sybilla Gross

(Bloomberg) -- Gold dropped to a two-week low on signs of potential trade-talk progress between the US and several other nations, quelling demand for a haven despite worries about weakening economies.

Prices slipped as much as 2.1% as investors weighed improving sentiment on Wall Street after President Donald Trump’s trade representative said he was nearing an announcement of a first tranche of deals. A report that the US had reached out to Beijing through various channels added to the optimism.

Bullion is still up 23% this year after hitting a record above $3,500 last week before losing some ground. The ascent has been driven mainly by investors taking refuge in the haven asset as Trump’s fast-evolving trade policy upended markets and stoked fears of a global slowdown. Speculative demand in China and central-bank buying has also supported gains.

Data on Wednesday showed the US economy contracted at the start of the year for the first time since 2022 due to a monumental pre-tariffs import surge. That saw traders boost wagers on four quarter-point rate cuts by the Federal Reserve this year to help prevent a recession. Lower rates are typically positive for bullion as it pays no interest.

Looking ahead, a key monthly US jobs report due Friday will shed more light on the initial effects from Trump’s trade policies on the economy.

Spot gold was 2% lower at $3,223.51 an ounce by 10:39 a.m. in London. The Bloomberg Dollar Spot Index rose 0.3%. Silver fell by more than 1% and platinum edged lower. Palladium was little changed

--With assistance from Jack Ryan.