(Bloomberg) -- Gold rebounded as investors focused on a key US inflation report, after the precious metal slumped with other haven assets on Monday following a trade truce between Washington and Beijing.
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Bullion rose 0.6% to trade above $3,250 an ounce, after a major de-escalation in US-China trade tensions triggered a sharp selloff. Investors will be watching the US inflation report for April, potentially the first to show tariff-related costs.
On Sunday the world’s biggest economies agreed to temporarily lower tariffs, with the US slashing duties on Chinese products to 30% from 145% for a 90-day period, while Beijing dropped its levy on most goods to 10%.
The US dollar rose the most since a post-election rally in November, while Treasury yields climbed — both acting as headwinds for gold. Traders now see just two rate cuts from the Federal Reserve in 2025 in a reset of inflation expectations. That reduces bullion’s appeal as the metal pays no interest.
Gold remains almost a quarter higher this year, although the easing of US-China tensions has given traders a clear indication President Donald Trump’s administration is taking a softer approach to trade with the world’s second-largest economy. Still, some investors remain wary about the lack of detail in their announcement, and another flare-up could propel bullion back toward the record set last month.
“The devil is in the details during negotiations,” said Christopher Wong, a strategist from Oversea-Chinese Banking Corp. “Some degree of caution remains warranted, as we see consolidation in the range of $3,150 to $3,350 an ounce.”
Spot gold climbed to $3,255.59 an ounce at 9:58 a.m. in London. The Bloomberg Dollar Spot Index eased 0.2%, after rising 1% on Monday. Silver and platinum rose, while palladium was little changed.
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