Gold Prices Decline After US, China Upcoming Trade Talks Reduce Global Economic Uncertainty a Bit

Gold Prices declined today after US, China decide to start another round of trade talks in London. This lowered global economic uncertainty a bit.

Gold prices edged lower on Monday as hopes of a breakthrough in US-China trade negotiations reduced investor demand for safe-haven assets. The decline was further compounded by robust US job data, which dimmed expectations of imminent interest rate cuts by the Federal Reserve.

How Are Spot and Futures Markets Moving?

As of 0214 GMT, spot gold fell by 0.4% to $3,298.12 per ounce. Meanwhile, US gold futures registered a steeper drop, losing 0.9% to settle at $3,317.40.

Trade Uncertainty Weighs on Demand

The easing of geopolitical tensions between the United States and China played a central role in reducing gold’s allure. Top aides of U.S. President Donald Trump were to meet their Chinese counterparts in London to discuss the ongoing trade standoff between the world’s two largest economies.

Market players, particularly short-term traders, are being cautious and refraining from putting on aggressive positions ahead of potential developments in the talks. While tariffs are unlikely to be removed entirely, a more conciliatory tone may lower baseline trade risks and ease market volatility.

Strong US Jobs Data Shifts Rate Cut Outlook

Underpinning gold’s downward pressure, the US economy reported better-than-expected employment numbers for May. The Labor Department reported 139,000 more jobs, and the unemployment rate held steady at 4.2%. Wage growth also exceeded forecasts, further dampening prospects of near-term rate cuts by the Fed.

Investors have since reduced expectations for rate cuts, with the markets now expecting a cut only in October. All attention is now centered on the next Consumer Price Index (CPI) data, which is due on Wednesday, for further cues on inflation and policy.

Broader Market Snapshot

Other metals showed mixed reads. Spot silver remained flat at $35.97 an ounce, while platinum fell 0.5% to $1,163.64 and palladium was at $1,046.18.

Outlook

While trade tensions have eased somewhat and economic indicators remain resilient, the immediate bullish story for gold appears muted. But geopolitical developments and upcoming inflation data could still shift the market sentiment in the coming days.

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