World gold prices plummet after news of US-China agreement

(Dan Tri) - World gold prices fell sharply after the US and China announced they had reached an agreement to suspend tariffs for 90 days.

On the evening of May 12, the world gold price plunged 2.5% to $3,239/ounce. This sharp decline occurred right after US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer announced that the US and China had reached an agreement to suspend tariffs for 90 days.

In addition, the reciprocal import tariffs of both countries will simultaneously decrease by 115 basis points. Accordingly, the US will temporarily reduce import tariffs on Chinese goods from 145% to 30%. Meanwhile, China will also reduce from 125% to 10%.

"The US dollar index rose as the Trump administration announced progress in trade negotiations. China also participated in the negotiations in Geneva (Switzerland) over the weekend, putting pressure on gold prices," said Jigar Trivedi, senior commodity analyst at Reliance Securities, in a report.

"In the short term, gold prices may continue to fall as the US dollar strengthens and demand for safe havens weakens due to decreasing geopolitical risks. Gold prices may fall to $3,200 an ounce in the near future," Mr. Trivedi added.

Beth Hammack, President of the Federal Reserve Bank of Cleveland, said the Fed needs more time to assess the impact of Mr. Trump's tax policies before making appropriate policy decisions.

Investors are also waiting for the US Consumer Price Index (CPI) report to be released to look for new signals on the Fed's monetary policy path.

World gold prices suddenly dropped sharply (Photo: Trading economics).

Trade tensions escalated in early April when the US raised tariffs on all imports from China to 145%. Beijing responded with tariffs of 125% on US goods.

Last weekend, US and Chinese officials met in Switzerland to discuss trade. After the meeting, the US side said it had reached an agreement to reduce the trade deficit with China.

US President Donald Trump also hinted at the possibility of reducing tariffs on China from 145% to 80%. Experts expect Washington to consider softer solutions.

On Xinhua, Chinese Vice Premier He Lifeng assessed that the negotiations were in-depth, frank and constructive. The senior Chinese official also confirmed that the two sides had reached a series of important consensuses, agreeing to establish an economic and trade consultation mechanism.

However, according to Reuters, most current and former advisers to President Trump believe that the US will face higher tariffs after trade negotiations end.

Source: https://dantri.com.vn/kinh-doanh/gia-vang-the-gioi-roi-thang-dung-sau-tin-my-va-trung-quoc-dat-thoa-thuan-20250512202713511.htm