Gold prices decreased on Wednesday as traders awaited further developments in high-level trade negotiations between the United States and China in London.

By 01:25 GMT, spot gold fell by 0.5% to $3,311.16 per ounce, while U.S. gold futures dropped 0.7% to $3,330.90. The ongoing discussions focus on issues including tariffs and restrictions on rare earth metals.

Tim Water, a senior market analyst, indicated that gold trading has been cautious as market participants look for signs of progress in the negotiations.

President Donald Trump stated that his administration is performing well in the talks, highlighting positive reports emerging from the discussions.

Last month, both parties agreed to a temporary halt on tariffs, providing some relief to financial markets.

Investors are now looking to U.S. inflation data set to be released on Wednesday for additional insights into the Federal Reserve's monetary policy trajectory.

Water commented that a slight increase in the Consumer Price Index would be expected; however, if the data shows a significant jump, it could trigger concerns among investors.

Such a reaction may prompt a flight to safety, potentially benefiting gold prices.

Gold traditionally garners attention during geopolitical and economic uncertainty, often performing well in low interest rate environments.

In other precious metals, silver declined 0.6% to $36.51 per ounce; platinum fell 0.8% to $1,210.46, and palladium decreased 0.2% to $1,071.75.