Gold dips below $3,300 on tariff reduction talks 

The precious metal reached a high of $3,422.80 per ounce on May 6 before retreating sharply, slipping below the key psychological zones of $3,400 and $3,300.

Market anticipation of a potential easing in trade tensions likely triggered the decline, putting pressure on the safe-haven assets.

Throughout the week, markets were abuzz with speculation over a 90-day mutual tariff rollback, with U.S. tariffs on Chinese imports expected to drop from 145% to 30% and China set to reduce its tariffs on U.S. goods from 125% to 10% by May 14.

As of May 12, 2025, news of the tariff easing has been officially confirmed following two days of high-level negotiations between U.S. and Chinese officials in Geneva, Switzerland.

Meanwhile, the U.S. dollar, tracked by the DXY index, has risen 1.30% since last week, adding further pressure on gold as investors shift toward the strengthening currency amid easing trade tensions.

Gold is facing a short-term pullback in the commodities market following reports of a potential easing of trade tariffs.

However, since closing above the $3,400 mark on May 6, gold has entered a downward phase, shedding more than 5% of its value.

The Geneva meetings marked the first face-to-face discussions between senior U.S. and Chinese economic officials since President Trump’s return to power and the onset of his global tariff strategy.

U.S. Treasury Secretary Scott Bessent described the talks as productive, emphasizing that both nations are committed to maintaining trade relations:

“The high tariffs imposed were essentially akin to an embargo, and neither side desires that. What we both want is trade.” 

Zhiwei Zhang, Chief Economist at Pinpoint Asset Management in Hong Kong, expressed surprise at the outcome, stating:

“This is better than I expected. I had anticipated tariffs being reduced to around 50%.”