Gold Prices Dip As US-China Trade Talks Reduce Safe-Haven Demand

Easing global tensions and signs of economic cooperation between Washington and Beijing push gold prices down, even as geopolitical uncertainties linger.

May 12, 2025 New Delhi: Gold prices slipped on Monday amid a positive turn in U.S.-China trade negotiations, which helped calm investor nerves and reduced demand for traditional safe-haven assets like gold. With both nations signalling progress and a potential new economic dialogue, bullion lost some of its recent gains driven by global uncertainty.

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Key Highlights:

• Spot gold dropped 1.1% to $3,286.86/oz, while U.S. gold futures fell 1.6% to $3,291.60/oz as of early Monday.
• The decline came after US and China concluded trade talks in Geneva, agreeing to reduce the US trade deficit and initiate a new economic forum.
• Chinese Vice Premier He Lifeng confirmed a joint statement would be released with “good news for the world,” while Vice Commerce Minister Li Chenggang also signalled optimism.
• The Federal Reserve held rates steady last week, but flagged inflation and job market concerns. Fed officials say more time is needed to assess the economic impact of President Trump’s tariff policy.
• Gold, often viewed as a hedge against global uncertainty, typically benefits from low interest rates and market fear — both of which have now slightly receded.
• The ongoing India-Pakistan situation continues to offer a layer of geopolitical risk, although not enough to outweigh the bullish cues from trade talks.
• Other precious metals: Silver eased 0.1% to $32.65, platinum rose 0.4% to $998.65, and palladium firmed 0.5% to $980.41.

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📊 Market Context:

While geopolitical tensions—particularly between India and Pakistan—remain unresolved, the stronger-than-expected diplomatic tone between Washington and Beijing has redirected market sentiment towards riskier assets. The strengthening US dollar and stabilizing economic outlook are further weighing down gold.

Also Read: US, China Seal Trade Pact to Slash Deficit Amid Warming Ties

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Gold prices today, US China trade talks, safe haven assets, Fed interest rate, Indian military, gold forecast, global markets, spot gold, bullion update