Gold prices encounter a "weekend storm" – substantial progress in China-US negotiations, ceasefire between India and Pakistan, Russia-Ukraine talks, US-Iran negotiations
Global risk aversion has receded, and gold has plummeted. High-level economic and trade talks between China and the United States have reached important consensus and made substantial progress. The ceasefire agreement between India and Pakistan was maintained on Sunday. Putin proposed to resume direct negotiations between Russia and Ukraine in Turkey on the 15th, and the previously postponed fourth round of talks between the U.S. and Iran has also begun
This past weekend was eventful, with positive developments in China-U.S. trade negotiations and a de-escalation of geopolitical conflicts in regions such as India and Pakistan, leading to a retreat in global risk aversion and a plunge in gold prices.
On Monday, during the early Asian market session, spot gold fell sharply by over $40, with a maximum intraday drop of 1.4%, and as of the time of writing, it was reported at $3,278 per ounce. Last week, gold rose by 2.6%.
According to CCTV News, important consensus was reached in high-level China-U.S. economic and trade talks, achieving substantial progress. Both sides agreed to establish a China-U.S. economic and trade consultation mechanism. The two sides will finalize relevant details as soon as possible and will release a joint statement on the outcomes of the talks on May 12.
This progress dampened the safe-haven demand for gold, shifting investors' focus to the negotiation outcomes between the world's two largest economies. The trade war initiated by the Trump administration has been a major driver of the surge in gold prices this year, pushing gold to a historic high of about $3,500 per ounce last month.
The easing of the trade war is not the only factor putting pressure on gold prices. A ceasefire agreement between India and Pakistan seems to have been maintained on Sunday, following four days of conflict between the two nuclear-armed nations that nearly sparked a full-scale war.
Additionally, there have been advancements in negotiations between Russia and Ukraine, as well as between the U.S. and Iran.
According to CCTV News, at 1:36 AM local time on the 11th, Russian President Putin held a press conference at the Kremlin. Putin proposed to resume direct negotiations between Russia and Ukraine in Istanbul, Turkey, on May 15. Putin stated that he would discuss the issue of holding Russia-Ukraine negotiations with the Turkish president.
Putin reiterated that Russia is willing to engage in direct negotiations with Ukraine without setting preconditions. The breakdown of previous negotiations in Istanbul was not due to Russia, and although military actions are still ongoing, Russia is willing to resume the previously interrupted talks with Ukraine.
The long-delayed fourth round of U.S.-Iran negotiations has also officially started. According to CCTV reports, it was learned from the Iranian side that the fourth round of negotiations between Iran and the U.S. regarding nuclear issues began on the same day in the capital of Oman.
As gold prices plunged, U.S. stock futures rose sharply on Monday. The three major U.S. stock index futures opened over 1% higher, with Nasdaq futures up 1.5% and S&P 500 index futures up 1.27%.
Analysts believe that as trade and geopolitical tensions ease, funds may begin to flow from safe-haven assets to risk assets, which will exert continued pressure on gold prices. However, ongoing purchases by central banks and speculative activities by retail investors may support gold prices to some extent, preventing a more significant decline
