FX.co ★ Gold Prices Sink About 3%

Gold prices dropped nearly 3% to $3,230 per ounce on Monday, reaching their lowest point in approximately a month. This decline was primarily due to improved investor sentiment and diminished demand for safe-haven assets, spurred by the announcement of a substantial tariff rollback between the US and China. Following trade talks in Switzerland over the weekend, the US revealed its intention to reduce tariffs on Chinese goods from 145% to 30%, while China agreed to lower tariffs on US imports from 125% to 10%. These adjustments are slated for a 90-day period and mark a significant de-escalation in the trade war, reflecting both nations' eagerness to seek compromise rather than persist in confrontation. Market optimism was further bolstered by a ceasefire between India and Pakistan, which persists despite ongoing allegations of violations by each nation. Additionally, the non-yielding metal faced further pressure after the Federal Reserve cautioned about rising inflation and labor market risks last week, with Chair Jerome Powell dismissing the possibility of a preemptive rate cut in response to the uncertainty arising from tariffs.