FX.co ★ Gold Drops on US-China Trade Talk Optimism

Gold prices dropped below $3,310 per ounce on Tuesday, driven by growing optimism regarding lessening US-China trade tensions, which in turn reduced safe-haven demand. High-level discussions between the US and China commenced in London on Monday and are scheduled to progress today, as both nations aim to solidify a delicate truce within a conflict that has widened from tariffs to include limitations on rare earth elements. Treasury Secretary Scott Bessent labeled Monday’s talks as a “good meeting,” and Commerce Secretary Howard Lutnick referred to them as “fruitful.” These remarks have heightened expectations for progress in improving relations between the world's two largest economies. Investors are also anticipating the release of US inflation data later this week to gain insights into the Federal Reserve's future monetary policy. Meanwhile, a survey released on Monday by the New York Federal Reserve indicated that Americans’ concerns about future inflation declined in May, while their confidence in personal finances strengthened.