After reaching fresh record highs at the beginning of last week, gold has been in the midst of a continuous drop. Meanwhile, the U.S. dollar ended its slide and steadied as U.S. President Donald Trump showed signs of softening his stance in the ongoing trade war.
Bullion gold peaked at $3,508.90 per ounce on Wednesday as investors turned to safer assets amid economic uncertainty caused by Trump’s sweeping tariffs. However, the 90-day pause on reciprocal tariffs and optimism that the U.S. will manage to negotiate new deals with its trade partners is changing that approach.
Gold is now down 5% from its record highs and is trading at $3,295.80 per ounce amid a profit-taking selloff. Investors are turning once again towards riskier assets while there is also belief that gold’s recent rally might have been too fast for the market to handle.
Meanwhile, promising signs that the U.S. and China will ease their trade war had a positive influence on the plummeting U.S. dollar. While being on track to have its biggest monthly slide in more than two years, the dollar seemed to have found a steady point in recent days.
The traders are standing pat in expectations of major US economic data, which are slated to be released this week. The US Dollar Index, which measures the value of U.S. currency against a basket of six major foreign currencies, is currently sitting at 99.58.