Gold Continues to Decline as U.S.-China Trade Relations Improve
Gold prices saw a decline during Asian trading on Tuesday, approaching their lowest level in more than a week, a drop recorded in the previous session. This decline is primarily due to improved risk appetite following an agreement between the United States and China to temporarily reduce mutual tariffs.
Gold Price Update:
- Gold stabilized at $3230.99 per ounce in spot trading by 03:09 GMT, marking a 2.7% drop in the previous session.
- U.S. gold futures rose by 0.2% to $3235.20 per ounce.
Reasons Behind the Declining Demand for Gold:
After two days of negotiations in Geneva, the U.S. and China announced tariff reductions for the next three months. Under this agreement, U.S. tariffs on Chinese imports were reduced from 145% to 30%, while Chinese tariffs on U.S. imports dropped from 125% to 10%. This agreement had a positive effect on global stocks, boosting risk appetite and reducing the demand for gold as a safe haven asset.
Tim Waterer, Chief Market Analyst at KCM Trade, stated, "The improved trade relations between the world’s two largest economies have increased risk appetite, thus reducing demand for gold as a safe-haven asset."
Market Outlook:
Market participants are awaiting the U.S. Consumer Price Index report, which is expected to be released later on Tuesday. This will provide new insights into the potential direction of the Federal Reserve's monetary policy.
Other Precious Metals Prices:
- Silver rose by 0.6% to $32.78 per ounce.
- Platinum increased by 0.8% to $982.70 per ounce.
- Palladium declined by 0.4% to $942.19 per ounce.
