Gold prices held steady on Tuesday as global markets closely monitored the second day of high-stakes trade negotiations between the United States and China in London. A firmer U.S. dollar, however, capped potential gains for the precious metal.
As of 0648 GMT, spot gold was little changed at $3,330.46 per ounce. U.S. gold futures mirrored the trend, trading flat at $3,350.30.
The U.S. dollar index (.DXY) strengthened by 0.2%, making gold more expensive for holders of other currencies and weighing on bullion’s price momentum.
Trade talks between Washington and Beijing are expected to cover a wide range of contentious issues, including tariffs and restrictions on rare-earth metals. Market participants are adopting a cautious stance amid the uncertainty.
“With U.S.-China trade talks still in the works, gold is trading reservedly until we see any progress is made between the two global superpowers,” said Tim Waterer, chief market analyst at KCM Trade.
U.S. President Donald Trump offered an optimistic tone, stating that negotiations were “doing well.” The two sides had earlier agreed to a temporary suspension of tariffs, providing a measure of relief to financial markets.
Meanwhile, economic data from China revealed that export growth slowed to a three-month low in May, as U.S. tariffs continued to pressure outbound shipments. In addition, factory-gate prices fell at their sharpest rate in two years, highlighting deepening deflationary concerns.
Investors are also awaiting key U.S. inflation data, with the Consumer Price Index (CPI) scheduled for release on Wednesday. The figures are expected to offer fresh insight into the Federal Reserve’s future monetary policy direction.
“If CPI has ticked marginally higher, that would be an expected result,” Waterer noted. “But if it jumps, then that could raise some alarm bells for investors, and any resulting flight to safety could help the gold price.”
Gold is often viewed as a safe-haven asset during periods of geopolitical or economic uncertainty and tends to perform well in low-interest-rate environments.
Other Precious Metals Weaken
In other precious metals markets, spot silver slipped 0.5% to $36.55 per ounce. Platinum was down 0.4% at $1,211.90, while palladium declined 0.8% to $1,066.28.
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