Gold prices experienced a decline on Monday as easing tensions between the U.S. and China enhanced investors’ risk appetite, thereby reducing the demand for safe-haven assets like bullion. Additionally, a stronger dollar added further pressure on gold.
In Dubai, gold rates saw a decrease, with 24-carat gold falling by AED2.50 to AED397.50. Similarly, 22-carat gold dropped AED2.00, bringing it to AED368.25. Additionally, 21-carat gold declined by AED2.00 to AED353.00, while 18-carat gold decreased by AED1.75, reaching AED302.50.
As of 04:31 GMT, spot gold was down 0.8 percent at $3,292.43 an ounce. This follows a remarkable peak of $3,500.05 reached on April 22. Meanwhile, U.S. gold futures saw a slight increase of 0.2 percent, bringing the price to $3,303.70. Spot fold stands now at $3,289.47.
Dollar strengthens, impacting bullion prices
The dollar rose by 0.2 percent against a basket of currencies, making gold bullion more expensive for international buyers.
“It’s probably fair to say that financial markets and risk-assets in particular are feeling slightly better about the tariff picture now compared to the frantic first week in April,” reported Reuters, citing Tim Waterer, Chief Market Analyst at KCM Trade. “Comments last week from the White House have fuelled optimism that a U.S.-China trade deal may eventuate, which has caused safe-haven demand for assets such as gold to subside.”
U.S. President Donald Trump has indicated that discussions regarding tariffs are ongoing with China. The Trump administration expressed a willingness last week to ease the trade war between the two largest economies, which has heightened recession fears.
On Friday, China exempted certain U.S. imports from its steep tariffs, although it quickly refuted Trump’s claim that negotiations were in progress.
Gold’s role in economic uncertainty
Gold, often viewed as a safeguard against economic and political uncertainties, typically flourishes in a low interest rate environment. However, many participants at the International Monetary Fund and World Bank Spring Meetings noted that Trump’s administration remains conflicted in its demands from trading partners affected by his extensive tariffs.
Read more: Dubai gold prices reach all-time highs as cultural festivals boost demand
Upcoming key data releases
Key economic data releases this week include the U.S. job openings report on Tuesday, Personal Consumption Expenditures on Wednesday, and the non-farm payrolls report on Friday. These reports may offer further clarity on the Federal Reserve‘s monetary policy outlook.
In related metals, spot silver fell by 0.6 percent to $32.88 an ounce, platinum decreased by 0.2 percent to $969.73, and palladium experienced a loss of 0.6 percent, reaching $943.28.
