Gold prices fell by over 1% on Monday, following signs of easing trade tensions between the U.S. and China. The rise in the dollar also reduced gold’s appeal as a safe-haven asset.
spot gold dropped 0.9% to $3,289.97 per ounce. Meanwhile, U.S. gold futures slipped 0.1% to $3,301.
The dollar index, which tracks the U.S. dollar against a basket of other currencies, rose by 0.3%. A stronger dollar makes gold less attractive for investors holding other currencies.
“Markets believe trade tensions are easing. This has reduced concerns about economic risks, lowering demand for safe-haven assets like gold,” said Giovanni Staunovo, an analyst at UBS.
Gold prices surged last week, reaching an all-time high of $3,500.05 per ounce due to rising trade tensions and the market’s flight to safety. As fears of a trade war subsided, gold saw a slight retreat.
Looking ahead, gold’s price may face further fluctuations. Despite the recent dip, analysts expect gold to rise again. The Federal Reserve is still anticipated to cut interest rates later this year, which could push gold prices higher.
Gold’s appeal as a store of value remains strong. While trade tensions ease, the uncertainty surrounding global economies keeps gold in demand.
President Donald Trump recently mentioned ongoing tariff talks with China. The Trump administration showed interest in de-escalating the trade war, which raised concerns about a global recession. On the other hand, China exempted some U.S. imports from tariffs, suggesting a potential path to de-escalation.
As the U.S. prepares for key economic data releases this week, including job openings, consumer spending, and non-farm payrolls, investors are waiting for further clues on the Federal Reserve’s rate decisions.
For now, investors are closely monitoring these developments. The demand for gold remains strong, particularly amid global economic uncertainty.
Gold prices continue to be influenced by a variety of factors. The ongoing U.S.-China trade tensions and potential rate cuts by the Federal Reserve will likely determine gold’s direction in the coming months.
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