Gold prices fell on Monday as optimistic US-China trade negotiations eased market concerns, leading investors to shift from safe-haven assets to riskier investments.
As of 04:32 GMT, spot gold had decreased by 1.4%, trading at $3,277.34 per ounce. Meanwhile, US gold futures dropped by 1.9%, settling at $3,281.70 per ounce.
Gigarl Trivedi, Senior Commodities Analyst at Reliance Securities, stated: “With the Trump administration boasting about the progress in trade talks, the US dollar index strengthened, while discussions in Switzerland over the weekend between China and the US put downward pressure on gold prices.”
The US and China concluded the high-stakes trade talks on Sunday with a positive tone. US officials announced an agreement aimed at reducing the US trade deficit, while Chinese officials noted that they had reached “important consensus.” Chinese Vice Premier He Lifeng mentioned that a joint statement would be issued in Geneva on Monday.
The two nations imposed reciprocal tariffs last month, escalating their trade war and exacerbating fears of a global economic recession. Most of Trump’s current and former advisers, interviewed by Reuters, indicated that once the trade talks with President Trump conclude, the US is likely to face higher tariffs.
Gold is traditionally viewed as a hedge against economic and political uncertainty and thrives in low-interest-rate environments.
Last Friday, Cleveland Federal Reserve President Beth Harmack emphasized that the Federal Reserve needs more time to observe how the economy reacts to Trump’s tariffs and other policies before deciding on the appropriate course of action.
Traders are also focusing on the upcoming US Consumer Price Index data due on Tuesday to gain new signals about the Federal Reserve’s monetary policy trajectory.
Trivedi added: “In the short term, gold prices may continue to fall as the dollar could appreciate. With lower geopolitical risks, the demand for safe-haven assets may also decrease, potentially pushing gold prices to $3,200 per ounce.”
Spot silver rose by 0.4% to $32.84 per ounce, platinum increased by 0.7% to $1,001.90 per ounce, and palladium gained 0.6% to $981.20 per ounce.
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