Gold Prices Drop Sharply
(MENAFN) Gold prices experienced a significant decline of over 5.3% on Tuesday after US President Donald Trump indicated a potential reduction in trade tensions with China. By 1500 GMT, the metal was trading near $4,126 per ounce, despite still maintaining a yearly gain of approximately 52.8%.
The precious metal had reached a record peak on Monday at $4,381.6, driven by escalating trade conflicts between the world’s two largest economies, anticipated interest rate reductions by the Federal Reserve, and central banks’ actions to increase gold holdings in their reserves.
However, following Trump’s comments on the possibility of achieving a "fair deal" with Beijing—after threats of imposing 100% tariffs in response to China’s tighter controls on rare earth exports—gold prices sharply dropped.
“We're going to be meeting in South Korea in a couple of weeks, and we'll see what we can do," Trump shared with reporters at the White House about upcoming discussions with Chinese President Xi Jinping.
"I believe after we leave South Korea ... we're going to have a very good relationship with China."
Adding to the optimistic outlook on trade, White House chief economic adviser Kevin Hassett told a news agency on Monday that he expects the government shutdown to likely end “sometime this week.”
However, if the shutdown continues, the Trump administration may implement “stronger measures” to compel Democratic cooperation, he noted.
The ongoing government shutdown, now in its 21st day, has disrupted the release of economic data.
Investors are now focusing on inflation figures set to be published on Friday, as these will be closely monitored ahead of the Federal Reserve’s meeting next week.
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