Gold falls over 2pc as US and China strike tariff deal
Spot gold was down 2.6% at $3,237.04 an ounce, as of 1132 ET (15:32 GMT). Bullion, considered a hedge against economic and geopolitical turmoil, hit a record high of $3,500.05 last month amid increased tariff uncertainty. US gold futures shed 3.1% to $3,241.70.
'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 US will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% and Chinese duties on US 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 US dollar surged to over a one-month high, and global shares rallied. A stronger greenback makes gold more expensive for foreign investors.
'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 US 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.
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