Insignia Consultants | Gold slides 3% as US, China agree to slash reciprocal tariffs
Gold slides 3% as US, China agree to slash reciprocal tariffs
May 12 (Reuters) - Gold dropped 3% to a more than one-week low on Monday after the United States and China said they had agreed to a deal to cut reciprocal tariffs, sending the dollar higher and denting the safe-haven metal's appeal.
Spot gold was down 3.3% at $3,215.07 an ounce, as of 1022 GMT, its lowest since May 1. U.S. gold futures slipped 3.7% to $3,218.70.
"The de-escalation of tensions between China and the U.S., with tariffs being reduced for 90 days, is reducing the demand for safe haven assets like gold," said UBS analyst Giovanni Staunovo.
"Near-term prices are likely to stay volatile. But higher tariffs are still weighing on economic growth and (will) likely force central banks to cut... interest rates later this year. Also central banks might use this price setback to add exposure."
In a substantial de-escalation, the U.S. and China said they have agreed on a deal to slash reciprocal tariffs as they seek to end a trade war that has disrupted the global economy.
