Gold prices have experienced a significant rebound, climbing 0.6% to $3,254.39 an ounce, following a temporary U.S.-China tariff truce. This development has encouraged investors to engage in bargain-buying, capitalizing on the recent dip in prices. The truce, which saw U.S. tariffs on Chinese goods reduced from 145% to 30% and Chinese tariffs on U.S. goods cut from 125% to 10%, has improved global market sentiment and diminished gold's appeal as a safe-haven asset. The U.S. gold futures market mirrored this trend, with prices increasing by 1% to $3,258.70. Market analysts attribute the uptick to value-buying and a consolidating dollar, with Federal Reserve Governor Adriana Kugler noting that the tariff reprieve reduces the need for immediate rate cuts. Traders are now awaiting the U.S. Consumer Price Index report for further insights into future Federal Reserve policy and gold prices.
The positive market response is not limited to gold. Other precious metals have also seen gains, with spot silver rising 1.5%, platinum climbing 1.2%, and palladium increasing by 0.6%. The broader market sentiment has been bolstered by the U.S.-China trade agreement, which has alleviated concerns about a potential economic slowdown. However, despite the positive developments, traders remain cautious, closely monitoring upcoming economic indicators, including the U.S. Consumer Price Index report, to gauge the broader impact of the trade truce on the economy and financial markets.