Gold Prices Slide as U.S.-China Trade Deal Boosts Risk Appetite

Gold 

Deescalation in global tensions dents safe haven demand; industrial metals trade mixed.

Gold prices plummeted Monday as investor sentiment shifted toward riskier assets following a U.S.-China trade breakthrough that eased global recession fears. At 08:55 ET (12:55 GMT), spot gold had dropped 2.9% to $3,229.54/oz, and gold futures for June declined 3.4% to $3,231.04/oz.

The move follows a rare joint statement from Washington and Beijing announcing a 90-day tariff pause and mutual tariff reductions. U.S. President Donald Trump agreed to reduce “reciprocal” tariffs on Chinese goods to 10%, while China mirrored the move on U.S. imports. A 20% tariff remains on Beijing-linked fentanyl trade.

The detente—following months of tariff warfare—has dulled gold’s allure after it hit a record $3,500/oz on safe haven buying.

Ceasefire Between India and Pakistan Further Pressures Gold

Gold also faced downward pressure after a U.S.-brokered ceasefire between India and Pakistan appeared to hold. Initial accusations of violations over the weekend in the Kashmir region have subsided, with military tensions easing over the past 36 hours.

Washington’s offer to mediate the Kashmir dispute was welcomed by Pakistan but not acknowledged by India, keeping geopolitical uncertainty in play but reducing immediate conflict risk.

“Gold is still up over 20% this year,” ING analysts noted, “driven by Trump's unpredictable trade policies.”

Other Metals React: Silver and Platinum Drop, Copper Mixed

Other precious metals followed gold’s lead:

• Platinum futures fell 2.3% to $978.90/oz
• Silver futures declined 1.4% to $32.48/oz

Copper prices showed mixed results as markets weighed stronger U.S. dollar pressures against the potential economic lift for top importer China:

• LME copper rose 0.9% to $9,529/ton
• U.S. copper futures slipped 0.4% to $4.6348/lb

“While the trade deal signals progress,” ING noted, “volatility remains high across commodities markets due to persistent uncertainty about tariff policy endgames and short-term economic data.”

Copper, in particular, suffered in April, posting its worst performance since mid-2022 amid weak U.S. growth and China's manufacturing contraction—the worst since December 2023.