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On Tuesday, gold prices experienced a decline, impacted by a rise in the US dollar as traders awaited updates from the ongoing trade discussions between the US and China in London.
The price of spot gold dipped by 0.6 percent, reaching $3,307.72 per ounce by 0502 GMT. Concurrently, US gold futures saw a decrease of 0.8 percent, trading at $3,327.50.
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The dollar index increased by 0.3 percent against other currencies, making gold less affordable for holders of different currencies.
The trade discussions between the two largest global economies are addressing various matters, including tariffs and restrictions on rare earth metals.
“As the US-China trade negotiations continue, gold prices remain hesitant until there are clear signs of advancement between these superpowers,” noted Tim Waterer, chief market analyst at KCM Trade.
President Donald Trump stated that his administration is performing well in the negotiations.
Last month, both countries paused tariffs against one another temporarily, which brought some relief to the financial markets.
Recent data from China indicated that export growth slowed to its lowest point in three months in May due to the impact of US tariffs on shipments, while deflation at factories reached its deepest level in two years.
Additionally, US inflation data set to be released on Wednesday may provide investors with insight into the future course of monetary policy by the Federal Reserve.
“A slight increase in CPI would be expected, but a significant jump could cause concerns among investors, potentially triggering a flight to safety that could boost gold prices,” Waterer remarked.
Historically, gold tends to gain attractiveness during periods of geopolitical and economic instability, particularly when interest rates are low.
Meanwhile, spot silver dropped by 0.5 percent to $36.52 per ounce, platinum remained unchanged at $1,219.65, while palladium rose by 0.4 percent to $1,078.94.