Gold prices fell after the US and China agreed on significant tariff cuts
Today, gold markets have witnessed a noticeable decline in prices, influenced by the trade agreement between the United States and China, which included significant reductions in mutual tariffs.
Gold prices fell by about 3% to 3,230 dollars per ounce on Monday, hitting their lowest level in about a month, following improved investor sentiment and reduced demand for safe-haven assets following news that the United States and China have canceled major tariffs, which boosted investor confidence and led to a shift of funds towards riskier assets.
The US - China agreement eases the trade war
The United States announced that it will reduce tariffs on Chinese goods from 145% to 30%, while China will reduce tariffs on American imports from 125% to 10%, both for 90 days.
US officials confirmed that some other trade measures will remain in effect, but the tariff cuts will continue for 90 days, as a test period that allows the parties the opportunity to conduct further negotiations, and this development contributed to strengthening market sentiment, which led to a decline in demand for gold as a safe asset.
The easing of geopolitical tensions puts pressure on the yellow metal
Along with positive trade developments, some positive geopolitical indicators contributed to reducing the demand for gold as a safe haven:
- India-Pakistan ceasefire: the ceasefire between the two nuclear powers has shown stability after days of military escalation on the border, easing fears of a wider conflict in the region.
- Ukraine-Russia talks: Ukrainian President Volodymyr Zelensky challenged his Russian counterpart Vladimir Putin to meet in Turkey next Thursday, in a preliminary step that could pave the way for a possible ceasefire, after months of stalemate in talks between the two countries.
Market effects and the future of gold
As the prospects for global trade improve and political tensions subside, investors are turning towards high-yielding assets, putting downward pressure on gold.
However, the yellow metal remains a strategic option for hedging in the long term, especially in the event of renewed economic or geopolitical risks in the future.
The market is now waiting for more details about the US-China trade agreement, as well as the results of possible talks between Russia and Ukraine, which may determine the trends of gold and world markets in the coming period.
