Commerzbank’s commodity analyst Carsten Fritsch pointed out that the price of gold dropped below $3,300 per troy ounce overnight. This decline came after the precious metal climbed above the $3,400 mark on Tuesday, which was its highest level since it reached a record high two weeks ago.
The upcoming US-China trade talks, scheduled for this weekend, are at the center of market attention. “The fall in gold prices was triggered by news suggesting progress in the trade conflict,” Fritsch explained. The first high-level talks between representatives from the US and China are set to occur in Switzerland this weekend. Additionally, a trade agreement between the US and the UK was announced on Thursday.
“The negative price reaction clearly shows how much the tariff conflict initiated by US President Trump had previously pushed up the price of gold,” Fritsch said. “It also indicates what could happen if agreements are reached that lead to a reduction or removal of tariffs. This is especially significant in the case of a potential US-China agreement.”
Another factor that likely contributed to the headwinds for gold was when Fed Chairman Powell dampened hopes of early interest rate cuts by the US Federal Reserve during the press conference after the Fed meeting on Wednesday. Not long after, US President Trump criticized Powell, and as a result, gold prices briefly rebounded yesterday.
Related topics
- Gold Price Plummets Amid Hotter-Than-Expected PPI Data
- Gold Steadies on Geopolitical Tensions as Global Investment Surges in Q1
- Gold Price Holds Modest Gains Amid Geopolitical Tensions, Softer USD
