Gold prices dip as US‑China trade talks lift market optimism
Gold prices fall by $100 at the start of the week, marking the largest daily drop in six months. The reasons include the strengthening of the U.S. dollar and positive sentiment following weekend trade talks between the U.S. and China.
At the beginning of the week, gold prices fell by $100, marking the largest daily drop in six months.
Gold prices down
As reported by goldprice.org, the value of an ounce of gold is currently about $3,227, representing a drop of over 3 percent compared to weekend prices.
This drop is related to the strengthening of the U.S. dollar. The last time such high dollar valuations were observed was in mid-April.
On global markets, investor sentiment towards risk improved following trade negotiations that took place in Geneva between Washington and Beijing on Saturday and Sunday.
"Important consensus reached"
Chinese Vice Premier He Lifeng, who led the Beijing delegation during the trade talks with the U.S. Treasury Secretary, stated that an important consensus was reached. A consultative mechanism was announced, and regular contacts will be maintained.
The Chinese Vice Premier emphasized that the dialogue was conducted on equal terms and announced that, as a result of the talks, the global economy will receive a boost of "stability" and certainty. He declared that Beijing is ready to intensify areas of cooperation with the U.S.
Chinese Vice Minister of Commerce Li Chenggang, meanwhile, emphasized that the agreement will be in the interest of his country's development and announced that when a formal statement is published, it will contain good news for the world.
"As we say back in China, if the dishes are delicious, then timing is not a matter," said Li Chenggang.
U.S. Treasury Secretary Scott Bessent also noted that significant progress was made during the talks. He announced that additional details will be shared on Monday.
The aim of the talks held in Switzerland was to de-escalate the trade war between the U.S. and China.
After taking office in January this year, President Donald Trump raised tariffs on Chinese imports to 145 percent, to which China responded with its own tariffs of 125 percent on American goods.
These actions effectively halted trade between the world's largest economies, increasing the likelihood of a global economic crisis.
Breakthrough US decision on China
For now, markets are treating headlines about U.S.-China trade talks with cautious optimism, but vague statements about progress in negotiations are insufficient. Investors want tangible evidence such as tariff withdrawals or timelines of formal agreements by both sides, analysts indicate.
"While we remain skeptical that anything of substance could be agreed upon after only two days of talks, it’s clear that both sides are looking to de-escalate the situation," writes Win Thin, Global Head of Market Strategy at Brown Brothers Harriman & Co., in a market note.
The U.S. intends to temporarily reduce tariffs on Chinese goods to 30 percent for 90 days.
