[BENGALURU] Gold prices were steady on Tuesday (May 13) as a US-China agreement to pause tariffs for at least 90 days lifted risk appetite, diminishing bullion’s safe-haven appeal, while investors awaited key US inflation data for further economic cues.
Spot gold held its ground at US$3,235.37.86 an ounce, as at 0058 GMT. US gold futures rose 0.5 per cent to US$3,243.50.
Global shares rallied after the US and China agreed to slash steep tariffs for at least 90 days.
After two days of talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent said the two sides agreed to a 90-day pause under which tariffs would fall by over 100 percentage points.
The US will cut extra tariffs it imposed on Chinese imports last month to 30 per cent from 145 per cent for the next three months, the two sides said, while Chinese duties on US imports will fall to 10 per cent from 125 per cent.
The US dollar strengthened, hovering near a one-month high, consequently making greenback-priced gold more expensive for overseas buyers.
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China also agreed to remove export countermeasures implemented after Apr 2, which include restrictions on rare-earth minerals and magnets commonly used in high-tech manufacturing, US trade representative Jamieson Greer said.
Federal Reserve governor Adriana Kugler said the pause on import levies at levels that threatened to shut down bilateral trade reduces chances that the US central bank will need to lower interest rates in response to an economic slowdown.
Traders are also awaiting US Consumer Price Index report, due later in the day, for fresh signals on the Fed’s monetary policy trajectory.
The market currently pricing in a 55-basis-point rate cut this year by the Fed, starting in September, compared with the July view last week.
Gold, traditionally considered a safe-haven asset during time of political and economic uncertainty, tends to thrive in low-interest-rate environment.
Citi Research on Monday downgraded its gold price target for the next three months to US$3,150 per ounce and said it expects prices to consolidate amid progress on tariff negotiations.
Spot silver eased 0.2 per cent to US$32.54 an ounce, platinum rose 0.6 per cent to US$980.05 and palladium fell 0.7 per cent to US$980.05. REUTERS