Gold extended its steep intraday losses on Monday, plummeting to a fresh one-week low below the $3,250 mark following news of progress in U.S.–China trade talks.
The upbeat market sentiment was boosted by the announcement of a new deal between the U.S. and China to reduce tariffs—an agreement seen as a major factor diverting safe-haven flows away from the precious metal.
Gold futures dropped more than $120 per ounce as investors pulled back from haven assets.
The U.S. and China jointly announced a 90-day pause on imposing new tariffs and agreed to lower existing ones temporarily.
Washington has moved to reduce President Trump’s “reciprocal” tariffs on Chinese goods to 10%, alongside a 20% cut related to tariffs tied to fentanyl-related concerns.
A joint statement, issued after lengthy trade negotiations over the weekend, confirmed that U.S. import duties on Chinese goods would be reduced to 10%.
“We heard from both sides that they were not keen on ‘decoupling,’” said U.S. Treasury Secretary Scott Bessent, adding that there is now “a good mechanism” in place to ease tensions.
Further talks will reportedly take place on key economic and trade issues.
Investors, previously concerned that the trade conflict could escalate into a broader crisis threatening global economic activity, appeared to welcome the developments. U.S. stock futures surged, adding to Sunday evening’s gains prior to the announcement. The U.S. dollar also strengthened against a basket of currencies—a movement that typically pressures gold prices due to their inverse correlation.
China’s Vice Premier He Lifeng confirmed that a joint declaration will be released in Geneva on Monday, further bolstering market optimism.
Meanwhile, Russian President Vladimir Putin has expressed a willingness to negotiate with Ukrainian President Volodymyr Zelenskyy, stating that talks must begin “without any preconditions or delay” on Thursday, May 15.
On another front, Hamas has indicated that Edan Alexander, the last surviving American hostage, will be released. The group also acknowledged plans to negotiate directly with the U.S. to secure a ceasefire and resume humanitarian aid deliveries.
Looking ahead, traders are bracing for the release of U.S. inflation data. Markets are also focused on Fed Chair Jerome Powell’s upcoming address on Thursday for potential signals about the Federal Reserve’s next rate-cut trajectory and broader economic outlook.
Market dynamics show that gold is struggling below the $3,250 level, a critical confluence zone that includes the 100-period Exponential Moving Average (EMA) on the 4-hour chart and the 61.8% Fibonacci retracement of the recent upward move from the monthly low. This confluence may be viewed as a strong signal for bearish traders.
Additionally, technical indicators on the hourly chart remain bearish, suggesting that further downside movement in the yellow metal is likely.
The monthly low of around $3,200 per ounce is a key support level for buyers. Bullish momentum could resume if prices break back above the psychological level of $3,500—April’s all-time high.
The monthly low of around $3,200 per ounce is a key support level for buyers. Bullish momentum could resume if prices break back above the psychological level of $3,500—April’s all-time high.
Conversely, any recovery above $3,300 now appears to attract fresh selling interest, particularly in the $3,317–$3,318 range, which aligns with the Asian session peak.