Gold drops over 1% following a US-China truce
Gold declined more than 1% on Monday, its lowest in more than a week, as the dollar became stronger and investors went in for riskier assets after the US and China agreed to restart trade talks, reported Reuters.
Spot gold dropped 1.3% at $1,391.29 per ounce as of 0411 GMT, after falling to $1,389.65, its lowest since June 21. US gold futures dropped 1.3% to $1,394.90 an ounce.
On June 25, gold rose to $1,438.63 an ounce, which was its highest since May 14, 2013. This happened as the USD weakened and investors went after safer assets as they were concerned about the tensions between the United States and Iran escalating.
However, the prices dropped thereafter as market was hopeful of renewed talks between the US and China. This optimism was realised when the US and China agreed to restart their trade talks. US President Donald Trump announced that there will be no new tariffs on Chinese products and also restrictions on the tech giant Huawei were eased. China also agreed on new purchases of US farm products.
The trade truce between the two economies boosted the financial markets across the world and with this gold lost its sheen.
On Monday, the dollar index was up 0.2%, which made non-interest bearing bullion more expensive for holders of other currencies. Holdings of the SPDR Gold Trust declined 0.22% on Friday.
Silver dropped 0.6% to $15.21 per ounce and palladium was steady at $1,537.72. Platinum declined 0.2% to $831.12 an ounce after it touched a six-week peak in the previous session.