Gold languishes near more than 1-week low after US-China tariff truce
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
38 minutes ago
- Yahoo
Indian dealers offer steeper discounts as price rally dulls demand
By Rajendra Jadhav and Brijesh Patel (Reuters) - Gold discounts in India widened this week to their highest levels in more than a month, as a rally in domestic prices to near-record highs weighed on demand, while elevated rates also dampened buying across other major Asian hubs. Domestic gold prices were trading around 98,300 rupees per 10 grams on Friday, after rebounding from a low of 90,890 rupees last month and nearing the all-time high of 99,358 rupees. The spike in prices forced Indian dealers to offer discounts of up to $56 an ounce below official domestic prices, which include a 6% import duty and 3% sales tax, up from $31 last week. "Prices have gone up, and that's really hit demand. Hardly anyone was buying this week," said Harshad Ajmera of wholesaler JJ Gold House in Kolkata. Gold demand in India typically remains subdued during the monsoon season, which began earlier than usual this year. Jewellers are not making purchases because the lean demand season has started, and they don't want to build high-cost inventory, said a Mumbai-based bullion dealer with a private bank. Meanwhile, dealers in top gold consumer China charged premiums of $10-$14 an ounce over the global benchmark spot price. Last week, bullion changed hands at par to a $15 premium. "Elevated gold prices appear to have negatively impacted Chinese demand, judging by weaker trading volume," said Hugo Pascal, a precious metals trader at InProved. In Hong Kong, gold was sold at a premium of $0.30 to $1.30, while in Singapore gold traded between at-par prices and a $2.50 premium. "We've seen some of our clients coming to take profit and also on the wholesale side, we've seen some selling because prices are high," said Brian Lan, managing director at Singapore-based GoldSilver Central. In Japan, bullion traded anywhere between a discount of $0.5 and a $0.5 premium over spot prices.
Yahoo
an hour ago
- Yahoo
China says it may speed up rare earths application approvals from EU
By Brenda Goh SHANGHAI (Reuters) -China is willing to accelerate the examination and approval of rare earth exports to European Union firms and will also deliver a verdict on its trade investigation of EU brandy imports by July 5, its commerce ministry said on Saturday. Price commitment consultations between China and the EU on Chinese-made electric vehicles exported to the EU have also entered a final stage but efforts from both sides are still needed, according to a statement on the Chinese commerce ministry's website. The issues were discussed between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic in Paris on Tuesday, according to the statement. The comments mark progress on matters that have vexed China's relationship with the European Union over the past year. Most recently, China's decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. The ministry said China attached great importance to the EU's concerns and "was willing to establish a green channel for qualified applications to speed up the approval process." Commerce Minister Wang during the meeting "expressed the hope that the EU will meet us halfway and take effective measures to facilitate, safeguard and promote compliant trade in high-tech products to China," according to the statement. Chinese anti-dumping measures that applied duties of up to 39% on imports of European brandy - with French cognac bearing the brunt - have also strained relations between Paris and Beijing. The brandy duties were enforced days after the European Union took action against Chinese-made electric vehicle imports to shield its local industry, prompting France's President Emmanuel Macron to accuse Beijing of "pure retaliation". The Chinese duties have dented sales of brands including LVMH's Hennessy, Pernod Ricard's Martell and Remy Cointreau. Beijing was initially meant to make a final decision on the brandy duties by January, but extended the deadline to April and then again to July 5. China's commerce ministry said on Saturday that French companies and relevant associations had proactively submitted applications on price commitments for brandy to China and that Chinese investigators had reached an agreement with them on the core terms. Chinese authorities were now reviewing the complete text on those commitments and would issue a final announcement before July 5, it said. In April, the European Commission said the EU and China had also agreed to look into setting minimum prices of Chinese-made electric vehicles instead of tariffs imposed by the EU last year. China's commerce ministry said the EU had also proposed exploring "new technical paths" relating to EVs, which the Chinese side was now evaluating.
Bloomberg
an hour ago
- Bloomberg
Don't Count on a Sustained Fed-ECB Decoupling, Schnabel Says
It would be wrong to expect a persistent policy divergence between the US Federal Reserve and the European Central Bank, according to Executive Board member Isabel Schnabel. 'I expect this trade conflict to play out as a global shock that's working for both global demand and supply — we can discuss which of the two effects on inflation is larger because that that determines the net effect,' the German central banker said on Saturday.
