By Sarah Qureshi and Ashitha Shivaprasad
(Reuters) – Safe-haven gold fell 3% on Monday as risk sentiment crept in following the announcement of a temporary deal between the United States and China to reduce tariffs.
Spot gold was down 3% at $3,225.28 an ounce, as of 1344 ET (17:44 GMT). Bullion, considered a hedge against economic and geopolitical turmoil, hit a record high of $3,500.05 last month amid increased tariff uncertainty.
U.S. gold futures settled 3.5% lower at $3,228.
“Gold’s feverish response to last month’s chaotic headlines from the White House made the precious metal vulnerable to Trump back-tracking,” said Adrian Ash, BullionVault director of research.
“Now that the mood music is more hopeful, gold is likely to find upside potential on setbacks to this optimism.”
The U.S. will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two sides said. The new measures are effective for 90 days.
In other markets following the deal, the U.S. dollar surged to over a one-month high, and global shares rallied. A stronger greenback makes gold more expensive for foreign investors. [USD/] [US/]
“June gold futures bulls have lost their overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,350. First resistance is seen at $3,250 and then at $3,275,” said Jim Wyckoff, senior analyst at Kitco Metals.
Traders now await the U.S. Consumer Price Index data, due on Tuesday, to get direction on the Federal Reserve’s policy path. Other key data sets due this week include the Producer Price Index and retail sales.
Lower interest rates raise the appeal of non-yielding bullion.
Spot silver slid 0.9% to $32.4 an ounce, platinum fell 1.9% to $976.06 and palladium dipped 3.4% to $942.69.
(Reporting by Sarah Qureshi and Ashitha Shivaprasad in Bengaluru; Editing by Vijay Kishore and Shailesh Kuber)
