The precious yellow metal fell more than 2.50% throughout Wednesday's trading as risk appetite improved following the easing of the trade conflict between the United States (US) and China.
In addition, President Donald Trump said he had canceled his intention to fire Fed Chairman Jerome Powell.
At 9.20 am, gold prices were at $3,360.09, recovering 2.08% since it opened in Thursday's Asian session.
However, the financial market narrative is still facing the main sentiment. The threat of tariffs continues to drive a surge in inflation and news that the United States will reduce duties on China has caused a rebound in US stocks and a drop in gold prices.
According to a news report by The Wall Street Journal, US Treasury Secretary Scott Bessent revived calm in the market mood and Donald Trump's implementation of reducing China tariffs with the hope that Beijing will do the same.
In addition, Donald Trump's action to not intend to fire Jerome Powell and he only wants the interest rate cut action to be implemented faster.
The Federal Reserve (Fed) chances of cutting interest rates at the next meeting are slim and the market sees a high potential for the Fed to keep it unchanged.
