Gold Drops 3.2% to $3,288.44 as Trade Optimism Rises

Spot gold prices experienced a notable decline, falling below the $3,280 per ounce mark on Wednesday. This drop marked the third consecutive day of decreases, with the price closing at $3,288.44 per ounce. The market's optimism surrounding potential trade policy changes contributed to this downward trend. Investors were cautiously awaiting key economic data releases, particularly the US Personal Consumption Expenditures (PCE) report, which is crucial for gauging the Federal Reserve's interest rate trajectory. The easing of US-EU trade tensions also played a role in capping gold's upside potential, as the broader market sentiment remained generally upbeat.

Analysts noted that if support in the $3,250-$3,280 region holds, gold could potentially rally towards $3,400 if risk appetite fades. However, more decisive movements in gold prices may need to wait until further clarity is provided by upcoming economic indicators and policy developments.