Gold prices fell more than 1 per cent on Wednesday, pressured by a firmer dollar and US-China trade talks optimism, while the focus is on Federal Reserve's policy decision due later in the day, reports Reuters.
Spot gold slipped 1 per cent to $3,395.29 an ounce as of 0957 ET (1357 GMT). US gold futures lost about 0.6 per cent to $3,403.50.
The US dollar gained 0.2 per cent against other fiat currencies. A stronger dollar makes gold more expensive for other currency holders.
"China and the United States are formally trying to start a conversation on tariffs, igniting optimism in risk markets," said Bart Melek, head of commodity strategies at TD Securities.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's economic tsar He Lifeng in Switzerland this weekend for talks that could be the first step toward resolving a trade war disrupting the global economy. Gold, considered a hedge against geopolitical risks, has risen 29.4 per cent so far this year.
Bank of America said, "while we see limited upside (for gold) near term, we expect prices to push higher again in second half of 2025, potentially hitting $4,000."
Elsewhere, spot silver shed 1.4 per cent to $32.81 an ounce, platinum dropped 0.1 per cent to $986.15 and palladium edged 0.7 per cent higher to $981.03.
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