Investing.com - Gold prices gave back the prior session’s gains as investors’ risk appetite showed signs of recovery from the recent rout caused by Sino-U.S. trade tensions.
At 8:02 AM ET (12:02 GMT), gold futures for June delivery on the Comex division of the New York Mercantile Exchange dropped $3.90, or 0.3%, to $1,277.10 a troy ounce, once again matching Tuesday’s closing price.
Wednesday’s gains in the precious metal were supported by safe haven demand on news that China is prepared to use rare earths to strike back at the U.S., an escalation of the trade dispute that threatens to derail the global economy.
But risk appetite made a tepid recovery on Thursday with traders shifting investments back to global stocks at the cost of the precious metal.
The U.S. dollar remained firm against major rivals, hovering near two-year highs and thus failing to help gold’s appeal. A stronger greenback makes the dollar-denominated asset more expensive for holders of foreign currencies.
On the data front, investors will eye updated U.S. gross domestic product data at 8:30 AM ET (12:30 GMT). First quarter growth is expected to be revised down to 3.1% from the initial reading of 3.2%.
The expected downward revision comes amid recent signs of economic weakness on a global level and fears that the escalation of the Sino-U.S. trade conflict could lead to a recession.
Although the chorus of policymakers at the Federal Reserve maintain their stance that interest rates are at the appropriate level, markets have become increasingly skeptical. Fed fund futures currently price in the probability of 25 basis point rate cut for September at above 50%.
Fed Vice Chairman Richard Clarida could give an update when he speaks in New York on the topic of "Sustaining Maximum Employment and Price Stability" at 12:00 PM ET (16:00 GMT).
In other metals trading, silver futures dipped 0.1% at $14.402 a troy ounce by 8:05 AM ET (12:05 GMT).
Palladium futures fell 0.7% at $1,335.20 an ounce, while sister metal platinum was little changed at $791.80.
In base metals, copper fell 0.9% to $2.639 a pound.