Gold drops 3.5% as dollar rises, US-China tariff deal eases trade tensions

Gold bars

Gold prices tumbled on Monday as a stronger US dollar and easing trade tensions between the United States and China weighed on demand for the safe-haven metal.

June gold futures fell 3.5%, or $116, to settle at $3,228 an ounce, reversing some of last week’s 3% gains driven by heightened trade uncertainty.

The US dollar index — which tracks the greenback against a basket of six major currencies — rose 1.45% to 101.79 as of 10:02 p.m. Makkah time.

The drop in gold came after Washington and Beijing reached a deal to significantly reduce tariffs for 90 days as they negotiate a broader trade agreement.

Analysts at UBS said the temporary de-escalation in US-China trade tensions has dampened demand for safe-haven assets like gold, though prices are likely to remain volatile in the near term.