Gold Sees Red as US-China Trade Tensions Start Easing

This week saw the prices of gold and silver futures drop as more reports showed that the U.S. and China’s trade war was easing. July silver prices dropped to $32.44 while June gold declined to $3222.50.

The trade war was first reignited when President Trump imposed a 10% tariff on all Chinese imports earlier in February. The tensions were further fueled by the introduction of Trump’s ‘liberation day’ tariffs, which collectively affected America’s trading partners, with some rates hitting as high as 50%.

China was the hardest hit, with American tariffs on Chinese imports hitting 145%. In response, China increases duties on American imports to 125%.

Now these major economies seem to be working on better trade relations, with most of the recently imposed tariffs on imported goods being axed for a 90-day period. This comes after Treasury Secretary Scott Bessent announced at the start of the week that America would roll back its tariffs on Chinese goods to 30% as they continued negotiations with Beijing.

This period indicates a significant de-escalation in the ongoing trade tensions between the two countries and may help restore business confidence and stabilize global markets.

The dialogue between these major economies will be led by U.S. Trade Representative Jamieson Greer, U.S. Treasury Secretary Scott Bessent, and Chinese Vice Premier He Lifeng.

Following a joint statement released by the U.S. and China and their ongoing negotiations in Geneva, Switzerland, European and Asian stock markets saw moderate gains in overnight trading.

U.S. indexes were also poised for strong openings in New York. Additionally, crude oil prices surged, with Nymex futures trading at about $63.25 a barrel. This is a sign that investor appetite for commodities tied to economic growth is improving.

In other markets, the U.S. dollar index climbed to a 4-week high, with the 10-year Treasury yield hitting 4.45%. This reflects expectations of economic stability and decreased demand for safe-haven assets like gold. From a technical perspective, gold bulls have lost near-term control. Analysts see initial resistance at $3250 and then $3275, while support is noted at the May low of $3209.40, followed by $3200.

In contrast, silver remains slightly more stable with bulls aiming for a close above $34.015, while immediate support lies at $32.00 and then $31.86.

Currently, market participants are waiting on the U.S. Treasury monthly budget statement, and the USDA monthly supply and demand report to be released. The data released could further influence sentiment and price action in the days ahead.

Entities like Torr Metals Inc. (TSX.V: TMET) are unlikely to be overly concerned about the current price movements of gold in response to trade talks between America and China since these short-term fluctuations don’t take anything away from the long-term prospects of this precious metal.

NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET

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