A significant reduction in tariffs between the U.S. and China has weakened gold’s safe-haven appeal, driving prices lower. Citibank warns of further downside risks.
Gold Prices Plummet Amid Easing Trade Tensions
During Asian trading hours on Tuesday, May 13, market risk appetite increased further, sending spot gold (XAUUSD) prices tumbling to $3,200 per ounce.
On Monday, the U.S. and China announced major tariff reductions, alleviating trade tensions and sparking a sharp 3% decline in gold prices.
Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, commented: "The progress in U.S.-China trade negotiations has significantly eased tensions, boosting risk appetite and diminishing gold’s safe-haven demand."
Citibank Lowers Gold Price Forecast
Citibank has revised its three-month gold price target to $3,150 per ounce, citing continued downside pressure.
At present, gold price action is forming a classic "M" pattern—if prices break below the $3,201 support level from early May, a drop toward $3,000 could follow. However, if gold holds above $3,200, a potential rebound to new highs remains possible.
Spot Gold Price Chart – Source: TradingView.
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