Gold prices plummet as US‑China trade talks brighten outlook
Gold prices have dropped by $100 at the beginning of the week, marking the largest daily decrease in six months, reports Business Insider Polska. This decline can be attributed to the strengthening of the dollar and positive sentiment following the weekend's trade talks between the USA and China.
At the beginning of the week, gold prices fell by $100, representing the most significant daily drop in half a year.
Gold prices down
According to Business Insider Polska, the value of an ounce of gold is currently around $3,227, signifying a drop of over 3% compared to the prices before the weekend.
This reduction is linked to the strengthening of the dollar, which has concurrently surpassed the value of 3.81 PLN. The dollar last reached such a high level in mid-April.
In the global markets, investors' risk appetite improved after trade negotiations took place on Saturday and Sunday between Washington and Beijing in Geneva.
"An important consensus was reached"
Chinese Vice Premier He Lifeng, who led Beijing's delegation during trade talks with the US Treasury Secretary, stated that an important consensus was reached. A consultation mechanism was announced, alongside the maintenance of regular contacts.
The Chinese Vice Premier emphasised that the dialogue was conducted on equal terms and announced that, as a result of the talks, the global economy would receive a "boost of stability and certainty." He declared that Beijing is ready to intensify areas of cooperation with the USA.
Chinese Vice Minister of Commerce Li Chenggang also emphasised that the agreement will be in the interest of his country's development and declared that a formal statement, containing positive news for the world, will be forthcoming.
"As we say back in China, if the dishes are delicious, then timing is not a matter," said Li Chenggang.
US Treasury Secretary Scott Bessent also assessed that significant progress was made during the talks. He announced that additional details would be released on Monday.
The aim of the discussions in Switzerland was to de-escalate the trade war between the USA and China.
After taking office in January, President Donald Trump increased tariffs on Chinese imports to 145%, to which China responded with its own tariffs of 125% on American goods.
These actions effectively halted trade between the world’s largest economies, simultaneously increasing the likelihood of a global economic crisis.
Breakthrough decision by the USA towards China
For now, markets are treating headlines about US-China trade talks with cautious optimism. However, vague descriptions of progress are insufficient, and investors are seeking tangible evidence such as tariff withdrawals, schedules, or formal agreements between the two sides, analysts indicate.
Win Thin, Global Head of Market Strategy at Brown Brothers Harriman & Co, observed in a market note that although expectations for meaningful outcomes from only two days of discussions remain low, it is evident that both parties are aiming to de-escalate tensions.
The USA intends to temporarily reduce tariffs on Chinese goods to 30% for a period of 90 days.
