Gold prices ease on US-China trade optimism

Since the US-China trade deal, gold has declined nearly 3%. Among other metals, June silver futures shed Rs 522, trading at Rs 96,245 per kg. "Positive developments in US trade policy (are) diminishing the appeal of gold in the short-term," Capital.com's financial market analyst Kyle Rodda told Reuters. "I think that if we see continued progress in trade negotiations and deals being done between the US and its trading partners, gold can pull back further."

The US and China have arrived at an agreement to withdraw their previously announced reciprocal tariffs and counter tariffs for an initial period of 90 days. The tariffs for 90 days are reduced by 115 per cent by both the US and China against each other. China will impose 10 per cent tariffs on US goods, and the US will tax Chinese goods at about 30 per cent.

In the United States, traders are waiting for the US Producer Price Index data, which is coming on Thursday, for clues regarding the Fed's interest rate path, which could affect Indian gold prices as well. Meanwhile, the market expects a 53 basis points rate reduction this year, beginning in September.

Non-yielding bullion is often seen as a safeguard against inflation and is likely to flourish during times of low-interest rates. Meanwhile, inflation data released by the Ministry of Statistics and Programme Implementation on Tuesday showed retail inflation in India in April fell to 3.16 per cent from 3.34 per cent in March.

Last month, according to the World Gold Council, safe-haven gold demand, in volume terms, dropped in Indian markets in the January-March quarter of 2025 due to an unprecedented rise in its prices.