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. 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 US$3,150 to US$3,350 an ounce.”
Spot gold was steady at US$3,239.66 an ounce at 12:31 p.m. in Singapore. The Bloomberg Dollar Spot Index eased, after rising 1% on Monday. Silver and platinum rose, while palladium was little changed.
