Gold Falls as Trade Talks, Easing Tensions Impact Haven Demand
Gold fell as its haven status was impacted by signs of progress in trade talks between US and China, along with some relief to geopolitical tensions.
Bullion fell as much as 1.4% in early trading in Asia, following a weekly gain of 2.6% as investors focused on the outcome of upcoming trade talks between the world’s two largest economies. The US and China both reported “substantial progress” after two days of talks in Switzerland aimed at de-escalating a trade war, although neither side immediately announced specific measures.
Meanwhile, a ceasefire between India and Pakistan appeared to be holding on Sunday after four days of clashes that brought the two nuclear-armed nations close to a full-blown war. Investors will also be watching as Donald Trump’s effort to secure peace in Ukraine reaches a decisive moment, with Volodymyr Zelenskiy challenging Vladimir Putin to engage in talks this week.
The trade war unleashed by the new US administration has powered gold’s 25% rally this year, sending bullion to a record of about $3,500 an ounce last month. While a softer stance on trade from the US would weaken haven demand, gold has also seen support from strong central bank buying and speculative Chinese retail activity.
Spot gold was 1.3% lower to $3,281.29 an ounce as of 6:17 a.m. in Singapore. Silver eased, while platinum and palladium advanced.
Source: Bloomberg
