Gold prices on Monday headed for the sharpest fall in more than a year to kick off the week and month, after a weekend pause in Sino-American tensions sparked a relief rally in assets perceived as risky, away from so-called havens like bullion.
August gold GCQ19, -1.29% dropped $21.60, or 1.6%, to $1,392.10 an ounce, which would mark the steepest point decline in the commodity since a $29.80 tumble back in June 15, 2018 and the sharpest percentage fall since April 11, when the most-active contract fell 1.57% according to FactSet data. At session’s lows, at $1,384.70 an ounce, the contract was off 2.1%, trading at its lowest since mid June of last year on both a point and percentage basis.
On Friday, bullion saw a roughly 1% gain for the week, and advanced 7.7% for June, The monthly rise was the largest for a most-active contract since June 2016. For the quarter, prices rose more than 8%.
Monday’s drop for the yellow metal comes after President Donald Trump and China President Xi Jinping met on the sidelines of Group of 20 gathering of major developed nations in Osaka, Japan and achieved a detente on trade tensions between the world’s largest economies that have underpinned uncertainty among Wall Street investors and driven a flight to gold and the safety of government debt.
Trump and Xi said the U.S. would maintain current tariffs but hold off on new ones and relax some restrictions for U.S. companies doing business with China technology giant Huawei.
“Gold opened the second half of the year by falling below $1,400 on growing expectations of a breakthrough in the talks on the trade war between US and China,” wrote Carlo Alberto De Casa, chief analyst at brokerage ActivTrades, in daily research note.
“From a technical point of