Market News

Gold declined on expectations U.S. President Donald Trump will ease the impact of his auto tariffs, weighing on haven demand amid hopes of a further dialling down of trade tensions.

Bullion fell as much as 1.2% to US$3,305.23 an ounce, following a 0.7% gain in the previous session, after a White House official said some levies on foreign parts for cars and trucks would be lifted and imported automobiles would get a reprieve from separate tariffs on aluminum and steel. A gauge of the U.S. dollar strengthened, making bullion more expensive for most buyers as it’s priced in the greenback.

Traders continue to weigh the outlook for the global economy amid heightened uncertainty over the impact of the fast-developing U.S.-led trade war, which has stoked haven demand for gold and led to its record-breaking run in recent months. The consequences of Trump’s tariff agenda should become even clearer this week, with a raft of data due on American jobs, inflation and economic growth.

“Although negotiations may progress slowly, the White House’s renewed willingness to engage has shifted market sentiment from panic selling to cautious optimism, putting some downward pressure on gold,” Pepperstone Group Ltd. research strategist Dilin Wu said in a note.

Still, if there are signs of labor market deterioration in U.S. reports due later this week, “expectations for a June Fed rate cut would likely firm, potentially reigniting another leg higher in gold,” Wu said.

There’s also little prospect of a reprieve in U.S.-Sino relations, after China’s top diplomat warned countries against caving in to Trump’s tariff threats. Meanwhile, U.S. Treasury Secretary Scott Bessent told CNBC that the U.S. has put China to the side for now and indicated it’s up to Beijing to take the first step in de-escalating the fight. The Chinese Foreign Ministry again denied it was in talks with Washington to find ways to whittle down the wall of tariffs separating the two largest economies.

Gold has climbed more than 25% this year as the trade war, expectations for a global slowdown, and tensions between the Trump administration and the U.S. Federal Reserve drove haven demand. The gains have also been supported by inflows into bullion-backed exchange-traded funds, central-bank buying and signs of strong speculative demand in China, even as physical consumption in the world’s biggest buyer falls.

Gold for immediate delivery fell 1% to $3,311.19 an ounce as at 10:55 a.m. in London. The Bloomberg Dollar Spot Index was up 0.3%. Silver and platinum edged higher, while palladium fell.

Sybilla Gross, Bloomberg News