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Gold Prices Claw Back Some Lost Ground From U.S.-China Trade Truce - Gold prices on Tuesday clawed back a portion of the territory lost at the start of the week after the U.S. and China declared a trade truce, but remained below $1,400.

Spot gold gained $7.50, or 0.5%, to $1,391.85 by 9:22 AM ET (13:22 GMT), while gold futures for August delivery on the Comex division of the New York Mercantile Exchange, rose $5.25, or 0.4%, to $1,394.55 a troy ounce.

“Until last week, gold bulls were in rapturous delight, riding the crest of speculation that the Federal Reserve will agree to a 50 basis points cut rate by July,” Barani Krishnan said.

Gold prices broke past $1,400 on the prospect of lower rates, only to see Fed Chairman Jerome Powell and his senior colleague James Bullard downplay those hopes, telegraphing in their speeches that they might be considering a quarter-point snip at most.

“If that wasn’t enough, Saturday’s meeting between presidents Donald Trump of the U.S. and Xi Jinping of China could turn the very premise of a rate cut on its head,” Krishnan added, noting that the Fed said it was closely watching the outcome to see if easing was necessary.

The outcome of the meeting between the leaders of the world’s largest economies was sufficient to bring risk appetite back to the markets, pushing safe haven gold back below the $1,400 handle.

“For investors, the weekend deal was a 'goldilocks' outcome: good enough to stop a further escalation in the tariffs’ tit-for-tat that hampers trade and slows global growth; but not too good to dissuade the Federal Reserve from cutting interest rates,” Allianz Chief Economist Mohamed El-Erian wrote in an opinion piece for Yahoo (NASDAQ:AABA) Finance.

“As such, investors feel comfortable putting more of their money at risk,” he added.

In other metals trading, silver futures fell 0.5% to $15.125 a troy ounce by 9:24 AM ET (13:24 GMT).

Palladium futures dipped 0.1% to $1,543.10 an ounce, while sister metal platinum lost 0.6% to $832.25.

In base metals, copper traded down 0.7% to $2.668 a pound.

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