Gold price falls below $3,200 as focus shifts from safe havens

Gold prices fell below the $3,200-an-ounce mark on Wednesday as easing US-China trade tensions continue to diminish the appeal of the safe-haven metal.

Spot gold fell another 2% by 10:30 a.m. ET to $3,183.76 an ounce, while three-month gold futures dropped 1.7% to $3,194.00 an ounce in New York.

Bullion has now declined 9% from its high of $3,500 last month that resulted from elevated trade war fears.

Investors began pulling away from gold since news broke last week that US and China were set to meet in Geneva for trade talks, which eventually ended in an agreement announced Monday morning.

“After the tariff truce announced over the weekend, we’ve seen stock markets surge higher, and at least in the short term, this has removed some of the safe haven focus that has helped propel gold to record highs in recent months,” said Ole Hansen, head of commodity strategy at Saxo Bank.

“There’s a risk of further downside if we take out that $3,200 level, then we could fairly quickly test $3,165,” he added.

Traders now await US producer price index data, due on Thursday, for cues on the Federal Reserve’s next move as consumer price data earlier this week revealed cooler-than-expected inflation for April.

(With files from Reuters)