Gold prices retreated from record highs on Wednesday, weighed down by a stronger US dollar and signs of easing trade tensions. Spot gold fell 0.4% to $3,302.58/oz, while US gold futures declined 0.7% to $3,310.70/oz. The decline follows a recent rally that saw gold prices reach an all-time high of $3,500.05/ounce on April 22, driven by global economic uncertainties and market volatility.

The US dollar index gained 0.1% against a basket of major currencies, making gold more expensive for holders of other currencies and applying downward pressure on bullion. According to Nicholas Frappell, global head of institutional markets at ABC Refinery, "there was a minor recovery in broad dollar strength, which led to a little bit of retracement in gold."

The easing of trade tensions also contributed to the decline in gold prices. US President Donald Trump signed a pair of executive orders aimed at easing the impact of auto tariffs, while the US trade team announced its first agreement with a foreign partner since the new tariff wave began. However, market analysts remain cautious, with Kyle Rodda, market analyst at Capital.com, noting that "even though the Trump administration is watering down tariffs, they are still high, and the confidence in US assets has been shaken — arguably permanently."

Investors are now focused on the release of key data points, including the US Personal Consumption Expenditures (PCE) price index later today and the nonfarm payrolls report on Friday. The PCE data is expected to show further moderation in prices, which could keep the door open for further Federal Reserve rate cuts. Markets currently anticipate a total of 95 basis points in Fed rate cuts by the end of the year.

The decline in gold prices was mirrored in other precious metals, with silver falling 0.7% to $32.72/oz, platinum dropping 0.6% to $971.75/oz, and palladium slipping 0.2% to $932.40/oz. The pullback in gold prices comes as investors adjust their expectations for Fed rate cuts and await further clarity on the direction of the US economy.

In the broader context, the decline in gold prices highlights the ongoing uncertainty in global markets. Despite the easing of trade tensions, investors remain cautious, and the confidence in US assets has been shaken. As the Federal Reserve navigates the complex landscape of interest rates and economic data, gold prices are likely to remain volatile, reflecting the ongoing uncertainty in the market.