"Market Mood Shifts"... Gold Prices Plunge Over 3% on Hopes for Progress in US-China Tariff Talks

International Gold Prices Plunge Over 3% on Hopes for US-China Tariff Talks
Risk Asset Investment Sentiment Improves Following Trump’s Conciliatory Remarks

International gold prices, which had been continuously reaching record highs due to demand for safe-haven assets, fell sharply on the 23rd (local time). This was because investor sentiment revived after US President Donald Trump made conciliatory remarks about both the US-China tariff negotiations and the Federal Reserve (Fed) Chair, who had been under mounting pressure in recent days.

On this day at the New York Mercantile Exchange, gold futures for June delivery closed at $3,294.1 per ounce, down 3.7% from the previous session. As of 1:43 p.m. Eastern Time, the spot price of gold was trading at $3,281.6 per ounce, down 3% from the previous session.

International gold prices, which had been continuously reaching record highs, fell sharply on the 23rd (local time) as investor sentiment revived amid hopes for progress in US-China tariff negotiations. Photo by Kang Jinhyung

The improvement in risk asset investment sentiment was influenced by President Trump lowering the pressure on Fed Chair Jerome Powell to cut interest rates, as well as growing expectations for progress in the US-China tariff negotiations.

After the close of the New York stock market the previous day, President Trump said of Chair Powell, "I have absolutely no intention of removing him," and added, "I wish he would be more proactive about the idea of a rate cut." Regarding the 145% tariff rate imposed on China since he took office, Trump stated, "It's very high. (In the future) it won't stay that high," suggesting that tariffs on China could be significantly reduced depending on the progress of negotiations.

Chris Weston of Pepperstone Group commented, "It's still early, but the market mood is clearly changing," and assessed that "the strong 'sell America' trend has partially reversed." However, concerns over uncertainty remain. Ole Hansen, Head of Commodity Strategy at Saxo Bank, said, "From a technical perspective, the risk of a deeper correction has increased as gold prices rose steeply to the $3,500 per ounce level and then fell sharply."