Spot gold pulled back on Wednesday, ending a five-day winning streak. During New York trading hours, prices briefly dipped to $3,260 an ounce before stabilizing somewhat and closing around $3,290 — a decline of roughly 0.6%. The pullback reflected a renewed appetite for risk assets and shifting policy expectations, which prompted some investors to lock in profits.

Tariff Talks and a Stronger Dollar Weigh on Gold

The market’s mood has shifted in recent days. Optimism surrounding U.S.-China trade negotiations picked up after President Trump remarked that a deal was “within reach.” His comments weakened gold’s appeal as a safe haven. U.S. Treasury Secretary Scott Bessent added to the sentiment by admitting that current tariffs on Chinese goods are unsustainable and could be revised to help move talks forward. Still, he emphasized that Trump wouldn’t lift tariffs unilaterally without concessions from Beijing — signaling Washington’s pragmatic approach, while acknowledging that uncertainty remains.

Dollar Rebounds, Rate Cut Expectations Ease

Aside from trade headlines, the Federal Reserve remains central to investor focus. Trump recently made it clear he has no plans to replace Fed Chair Jerome Powell — a move that reassured markets about the Fed’s independence. The dollar index bounced back about 0.3% on the day, putting pressure on dollar-denominated gold. Meanwhile, expectations for a Fed rate cut in May cooled slightly. Interest rate futures now price in a 68% chance of a cut, down from 75% last week — undercutting bullish momentum for gold.

Technical Picture Turns Neutral As Traders Await Direction

Gold had previously broken above the $3,500 mark to hit an all-time high, but the rally has started to lose steam. Momentum has weakened, and algorithmic trading likely triggered profit-taking around the recent peak. Prices retreated to the $3,260 level, which now serves as a key short-term support. A break below there could open the door to $3,220, while a bounce could face resistance between $3,340 and $3,380.

Long-Term Outlook Remains Supported by Fundamentals

Despite near-term weakness, sentiment toward gold over the longer term remains positive. Ongoing geopolitical tensions and a global environment of relatively loose monetary policy continue to provide structural support for prices. Looking ahead, investors expect more details from the White House on the China trade deal. In Europe, sanctions on Russia will also be closely watched.