Gold fell on Wednesday on profit-taking after prices hit record highs recently, with investors watching out for peace talks after US President Donald Trump’s administration agreed to hold more talks with Russia on ending the war in Ukraine.
Spot gold shed 0.2% to $2,928.52 an ounce, as of 0338 GMT, $14 shy of its all-time high of $2,942.70 hit last week.
US gold futures dropped 0.1% to $2,945.90.
“Gold’s upside remains capped as first round of talks between the US and Russia over potential peace deal in Ukraine has ended with no clear path but if they come out with a solid plan, then definitely it could be negative for gold,” said Ajay Kedia, director at Mumbai-based Kedia Commodities.
“There should be technical profit booking because war premium should be slightly eroding. The upside could be capped around $2,970 as resistance and $2,890 as support.”
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Trump’s administration said on Tuesday it agreed to hold more talks with Russia on ending the war in Ukraine after the initial Russia-Ukraine peace talks finished without Kyiv or Europe at the table. Bullion is viewed as a traditional hedge against rising inflation and geopolitical uncertainties.
“Trump’s presidency is creating macroeconomic and geopolitical uncertainties that are likely to prompt investors to diversify into gold,” analysts at ANZ said, adding that investment demand (in gold) would benefit from macroeconomic, geopolitical, trade and fiscal risks.
The bullion rose over 1% in the last session on concerns over economic growth, due to uncertainty surrounding Trump’s tariff plans prompting safe-haven flows into bullion.
The market now awaits the Federal Reserve’s January meeting minutes due later in the day for clues into the US central bank’s interest rate trajectory this year.
Spot silver dipped 0.9% to $32.57 an ounce. Platinum fell 1.3% to $974.32, and palladium was 1.3% lower at $974.56.
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