NEW YORK: Gold prices dropped more than 2% on Wednesday, hitting an over one-month low, as rising trade optimism boosted risk appetite, leading investors to shift away from bullion.
Spot gold slipped to its lowest since April 11, shedding 1.8% to $3,188.52 an ounce, as of 1011 ET (14:10 GMT). Bullion fell as low as $3,174.62 earlier in the session.
US gold futures eased 1.7% to $3,192.80. “The global relief rally sparked by the steep reduction in US-China tariffs has triggered a correction through technical levels in gold,” said Tai Wong, an independent metals trader.
Wall Street’s main indexes opened higher, driven by the tariff deal and on expectations of more trade agreements. Washington and Beijing agreed to reduce tariffs drastically and adopted a 90-day pause while the details are being worked out.
US President Donald Trump, in an interview on Tuesday, said he could see himself dealing directly with Chinese President Xi Jinping on details of a trade pact. He also said that “potential deals” with India, Japan and South Korea were in the works.
Gold, known as a safe haven in times of geopolitical and economic turmoil, scaled a record high of $3,500.05 last month. Prices are up 21.6% so far this year.