Gold prices experienced a decline, reversing gains from the previous session, as reduced trade tensions between the US and China lessened its appeal as a safe-haven asset. However, a lower-than-expected US inflation rate provided some support, raising expectations of potential interest rate cuts by the Federal Reserve. Gold ETFs also saw significant inflows, particularly from China, indicating continued investor interest.
- Gold fell to around $3,240 per ounce.
- Easing US-China trade tensions diminished its safe-haven status.
- The US and China agreed to a 90-day reduction of tariffs.
- US inflation rate eased to 2.3% in April, the lowest since February 2021.
- Gold ETFs recorded net inflows of 115 tons in April, the largest in over three years.
- China accounted for nearly 65 tons of the ETF inflows.
The interplay of factors suggests a complex environment for gold. While diminishing global economic uncertainty weighs down on its value, weakening inflation data may incentivize investment. ETF inflows indicate continuing conviction among investors, though their confidence may be tempered by evolving economic conditions.