Gold down 3% amid possible easing trade tensions between US, China

ISTANBUL

Gold fell around 3.2% on Monday to $3,981, after signals of easing trade tensions between the US and China and the signing of new trade agreements with several Asian countries.

Amid signals by US President Donald Trump of possible easing of trade tensions with China, gold prices have been posting declines in the last couple of days.

The precious metal’s all-time high of $4,381.6 last Monday was fueled by trade tensions between the top two economies, expectations of rate cuts by the Federal Reserve, and central banks’ move to purchase gold for their reserves.

But after Trump’s remarks about reaching a “fair deal” with Beijing, following threats to impose 100% tariffs over China’s move to tighten rare earth export controls, gold plummeted. And Trump’s three-country Asia tour also contributed to the gold prices’ decline. The US signed new trade agreements with Cambodia and Thailand.

Also, a meeting between US President Donald Trump and Chinese President Xi Jinping is scheduled in South Korea on Thursday. The two leaders are expected to ease tensions, which have been high for the last two weeks.

The ounce price of silver also dropped 4.3% to $46.5 on Monday.