Key Points:
- Gold declined by 1.6%, reaching a low of $3,258
- Traders are shifting away from safe-haven assets
- A morning briefing on US-China discussions is upcoming
Trump lauded recent discussions with China regarding tariffs shortly after the UK unveiled its trade agreement. With tensions easing, gold seems to be losing its appeal.
📢 Progress in trade seems to have prompted a rush from safe havens
- Gold price Xauusd was pressured on Monday morning as traders processed various trade discussions and announcements that seemed to reduce global tariff uncertainties.
- Gold fell by 1.6% during early Asian trading, dipping below $3,300 to reach a daily low of $3,258 per ounce.
🎯 Profits are being taken amid shifting risk appetites
- So, what’s driving this mild selling? On one hand, traders are locking in profits after gold’s rise earlier in May, when it nearly hit a record high. On the other hand, there’s a notable retreat from safe-haven assets, as investors return to riskier options like stocks and cryptocurrencies.
- This shift is largely due to the progress in US-China trade negotiations. Just days after Trump commended the discussions, the trade dynamics with the UK also shifted, reinstating a 10% tariff on British goods, while the US leaders engaged in talks about a potential trade ceasefire with China.
💡 Will the decline continue?
- On Sunday evening, Trump mentioned achieving “great progress” in talks with China after their delegations met in Geneva for discussions. Treasury Secretary Scott Bescent also shared an optimistic outlook, stating the talks were productive and that a morning briefing would follow.
- Where’s the money going? Gold typically serves as a hedge in uncertain times, so its allure may lessen when stability appears. However, if the forthcoming briefing does not alleviate concerns (like unexpected tariff increases), gold may once again react intensely.
