Gold Recovers with Focus on Inflation After Safe-Haven Selloff
Gold rebounded as investors focused on a key U.S. inflation report, after the precious metal slumped along with other safe-haven assets on Monday following a trade truce between Washington and Beijing.
Bullion rose 0.6% to trade above $3,250 an ounce, after a major de-escalation in U.S.-China trade tensions sparked a sharp selloff. Investors will be watching the U.S. inflation report for April, potentially the first to show the cost of tariffs.
On Sunday, the world’s largest economies agreed to a temporary tariff rollback, with the U.S. cutting duties on Chinese goods to 30% from 145% for a 90-day period, while Beijing lowered its levies on most goods to 10%.
The U.S. dollar rose the most since a post-election rally in November, while Treasury yields rose — both acting as a drag on gold. Traders now see just two interest rate cuts from the Federal Reserve by 2025 in a reset of inflation expectations. That reduces bullion’s appeal because the metal doesn’t pay interest.
Gold remains nearly a quarter higher this year, even as easing U.S.-China tensions have given traders a clear indication that President Donald Trump’s administration is taking a softer approach to trade with the world’s second-largest economy. Still, some investors remain wary about the lack of detail in its announcements, and another flare-up could push bullion back toward a record set last month.
“The devil is in the details during the negotiations,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. “Some degree of caution remains warranted, as we see consolidation in the $3,150 to $3,350 an ounce range.”
Spot gold rose to $3,255.59 an ounce at 9:58 a.m. in London. The Bloomberg Dollar Spot Index fell 0.2%, after rising 1% on Monday. Silver and platinum rose, while palladium was little changed.
Source: Bloomberg
