A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS
May 13 (Reuters) – Gold recovered on Tuesday on bargain-hunting after prices dropped to a more than one-week low in the previous session as a temporary U.S.-China truce in reciprocal tariffs lifted appetite for riskier assets and dented bullion’s safe-haven appeal.
Spot gold rose 0.5% to $3,250.50 an ounce, as of 0458 GMT. Bullion recorded a 2.7% decline in the previous session.
U.S. gold futures were up 0.9% to $3,255.30.
After two days of negotiations in Geneva, U.S. and China announced tariff reductions for the next three months, with U.S. tariffs on Chinese imports dropping from 145% to 30% and Chinese duties on U.S. imports falling to 10% from 125%, leading to a surge in global shares.
The U.S. and China had imposed tit-for-tat tariffs on each other last month, triggering a trade war.
“There is some value-buying happening on gold at current levels which is helping to prop up the price, despite the generally better outlook for global growth with the US and China on better terms,” said KCM Trade Chief Market Analyst Tim Waterer.
“The consolidation move in the dollar has allowed the gold price to make a mild push higher.”
Federal Reserve Governor Adriana Kugler said the pause on import levies reduces chances that the U.S. central bank will need to lower interest rates in response to an economic slowdown.
Traders await the U.S. Consumer Price Index report, due later in the day, for fresh signals on the Fed’s monetary policy trajectory.
The market is expecting a 55-basis-point rate cut this year by the Fed, starting September.
“If the inflation data happened to produce a downside miss this could take some momentum away from the USD, which could see gold make forward progress,” Waterer said.
Gold, traditionally considered a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
Meanwhile, Citi projected a continued short-term consolidation in the $3,000 to $3,300 range and downgraded the 0-to-3-month price target to $3,150.
Spot silver rose 1.3% to $33.02 an ounce, platinum rose 1.1% to $985.31 and palladium was up 0.2% to $947.51.
Reporting by Anmol Choubey in Bengaluru; Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Rashmi Aich
