Prices fell after Donald Trump and Xi Jinping’s meeting over the weekend, at which the leaders of the two largest economies agreed to resume negotiations.
Gold opened the third quarter with a slump back below $1,400 an ounce after the U.S. and China agreed to a truce in their trade war, dealing a blow for now to havens that were bolstered in recent months by the long-running tensions as well as prospects for looser monetary policy. Prices fell after Donald Trump and Xi Jinping’s meeting over the weekend, at which the leaders of the two largest economies agreed to resume negotiations. Still, the setback may be temporary as investors now train their focus on U.S. jobs data due Friday for clues on the Federal Reserve’s next move on policy.
Bullion hit a six-year high last week as the trade war dragged on, leading central banks including the Fed adopted a more dovish tone, and tensions spiked between the U.S. and Iran. Driven by speculation that U.S. interest rates may soon be headed lower, investors plowed funds into bullion-backed exchange-traded funds, which swelled 5% in June, the most since 2016.
Spot gold dropped as much as 1.8%, the biggest intraday fall in a year, to $1,384.06 an ounce, and was at $1,393.48 at 8:31 a.m. in Singapore. Prices hit $1,439.21 on June 25, the highest since 2013, and rallied 8% last month. A gauge of the U.S. dollar was steady on Monday after sagging 1.6% in June.
In other precious metals, spot silver fell 0.8%, platinum lost 0.3% and palladium gained 0.1%.