Gold prices on Tuesday were hovering near a more than one-week low hit in the previous session, as a U.S.-China agreement to temporarily halt reciprocal tariffs boosted risk appetite, diminishing gold’s safe-haven appeal.
Spot gold held steady at $3,230.99 an ounce, as of 0309 GMT. Bullion recorded a 2.7% decline in the previous session.
U.S. gold futures were up 0.2% to $3,235.20.
After two days of negotiations in Geneva, U.S. and China announced tariff reductions for the next three months, with U.S. tariffs on Chinese imports dropping from 145% to 30% and Chinese duties on U.S. imports falling from 125% to 10%, leading to a surge in global shares. [MKTS/GLOB]
The U.S. and China had imposed tit-for-tat tariffs on each other last month, triggering a trade war.
“The prospect of better trade relations between the world’s two largest economies has caused a pick-up in risk appetite and a pullback in safe haven demand,” said KCM Trade Chief Market Analyst Tim Waterer.
However, “the consolidation move in the dollar has allowed the gold price to make a mild push higher,” Waterer said. [USD/]
Federal Reserve Governor Adriana Kugler said the pause on import levies reduces chances that the U.S. central bank will need to lower interest rates in response to an economic slowdown.
Traders await the U.S. Consumer Price Index report, due later in the day, for fresh signals on the Fed’s monetary policy trajectory.
The market is expecting a 55-basis-point rate cut this year by the Fed, starting in September.
Gold, traditionally considered a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
“I still think buyers will be tempted on pullbacks in gold given that economic and geopolitical risks haven’t completely disappeared,” Waterer said.
Meanwhile, Citi projected a continued short-term consolidation in the $3,000 to $3,300 range and downgraded the 0-to-3 month price target to $3,150.
Spot silver rose 0.6% to $32.78 an ounce, platinum rose 0.8% to $982.70 and palladium fell 0.4% to $942.19.
