By Ishaan Arora and Brijesh Patel
(Reuters) – Gold fell more than 1% on Tuesday after briefly touching a record high of $3,500 earlier in the session, as comments by U.S. Treasury Secretary Scott Bessent hinting at a thaw in U.S.-China trade tensions fueled optimism in equities and strengthened the dollar.
Spot gold fell 1.5% to $3,372.68 an ounce by 3:46 p.m. EDT (1946 GMT), after rising as much as 2.2% to $3,500.05 earlier in the session. Meanwhile, U.S. gold futures settled 0.2% lower at $3,419.40.
“Comments (of the U.S. Treasury Secretary) this afternoon that hinted towards a possible thaw in the trade war with China, was really when (gold) started to sell off,” said Bob Haberkorn, senior market strategist at RJO Futures.
Bessent said Tuesday that he believes there will be a de-escalation in U.S.-China trade tensions, though he described the future negotiations with Beijing as a “slog” that has yet to begin.
U.S. stocks jumped more than 2%, and the dollar rebounded, buoyed by Bessent’s comments, after he called the tariff standoff unsustainable. [MKTS/GLOB][USD/]
The dollar index rose 0.7% against its rivals, making bullion more expensive for holders of other currencies. [USD/]
“Rallies in the stock market and the U.S. dollar index today are negative for the gold market,” said Jim Wyckoff, senior analyst at Kitco Metals.
Meanwhile, spot gold, up 29% so far this year, notched its 28th record high on Tuesday as it surged to the $3,500-per-ounce mark for the first time.
JPMorgan expects the rally to continue, projecting that gold will surpass $4,000 an ounce next year amid rising recession risks, higher U.S. tariffs, and persistent U.S.-China trade tensions, the bank said in a note on Tuesday.
Traders will also be watching speeches by several Federal Reserve officials later this week, hoping for insights into future monetary policy amid concerns about the central bank’s independence.
Non-yielding gold acts as a hedge against global uncertainty and inflation and tends to thrive in a low-interest-rate environment.
Gold’s relative strength index (RSI) stands at 74, indicating that the metal is overbought.
Spot silver fell 0.7% to $32.47 an ounce, platinum was down 0.8% at $953.64, and palladium jumped 0.6% to $932.75.
(Reporting by Brijesh Patel and Ishaan Arora in Bengaluru; Editing by David Evans and Mohammed Safi Shamsi)
