Gold prices slipped on Monday as positive US-China trade discussions alleviated market fears over tariffs, leading investors to shift from safe-haven assets towards riskier investments.
Spot gold was down 1.4 per cent at $3,277.84 an ounce, while US gold futures lost nearly 2 per cent at $3,279.20 in the morning trading hours on Monday, Reuters reported.
The US and China reportedly ended high-stakes trade talks on a positive note on Sunday, with US officials touting a “deal” to reduce the US trade deficit, while Chinese officials said they had reached “important consensus”.
The development also led to the strengthening of the dollar index.
Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-interest rate environment.
“The dollar index has advanced as the Trump administration touted progress in trade negotiations, with China following negotiations over the weekend in Switzerland which weighed on gold prices,” said Jigar Trivedi, senior commodity analyst at Reliance Securities.
Traders are also eyeing the release of the US Consumer Price Index on Tuesday for fresh signals on the Fed’s monetary policy trajectory.
“In the near term, gold possibly could continue to decline as the dollar could appreciate and amid reducing geopolitical risk the haven demand too may drop hence, the yellow metal may decline to $3,200/oz in the near term,” Trivedi said.
