2-3 minutes - Source CNBC
Spot gold was down 0.7% at $1,501.36 per ounce, having earlier hit its highest level since April 2013 at $1,534.31. U.S. gold futures were down 0.3% to $1,512.6 an ounce.
The Office of the U.S. Trade Representative said the Trump administration will delay 10% tariffs on certain Chinese products, including laptops and cell phones, that had been scheduled to start next month.
“A thawing, perhaps reconsideration of the new proposed tariffs has drained the heat from the (gold) rally for now,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“While this does not dramatically dim the overall positive outlook for gold, it will temper its momentum in the short term.”
U.S. stocks turned positive and the dollar rose on the news, with further momentum also coming from news that both sides had agreed to conduct phone calls on trade again in two weeks.
“Gold will be trading in a defensive position until the next two weeks; there will be some buying at the dips but the explosive moves higher we’ve seen in the last two weeks is not expected with the trade talks hanging over the market,” said Bob Haberkorn, senior market strategist at RJO Futures.
Gold’s rise to over 6-year highs earlier in the day was triggered by a rout in the Argentine peso and protesters clashing with police at the Hong Kong international airport after flights were disrupted for a second day.
Market focus is now on the U.S. Federal Reserve’s annual symposium next week for clues on the future trajectory of interest rates. Traders see a 91.2% chance of a 25 basis-point rate cut by the U.S. central bank this September.
Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, jumped 0.9% to 847.77 tonnes on Monday.
Among other precious metals, silver fell 0.5% to $16.97 per ounce, while platinum was up 0.5% to $856.41. Palladium, meanwhile gained 2% to $1,456.20 an ounce.