Spot gold prices slid on Monday, swinging sharply lower during the session with a plunge of more than $50 at one point. However, the drop pared back after key economic data was released, with gold eventually closing at $3,249.50 per ounce — down about 2.98% for the day. Prices traded between a session low of $3,215.00 and a high of $3,266.80, as market sentiment shifted swiftly in response to macroeconomic developments. Investor mood moved from pessimism to cautious observation.

The early drop was mainly triggered by signs of easing in U.S.-China trade tensions. Both countries announced the start of a 90-day tariff reduction period. The U.S. said it would lower tariffs on approximately $120 billion worth of Chinese imports from 145% to 30%, while China responded by trimming some tariffs on American goods from 125% to 10%. Markets interpreted this as a short-term improvement in trade relations, prompting a rebound in risk assets, a retreat in safe-haven demand, and a wave of selling pressure on gold during Asian trading hours.

Later in the day, gold clawed back some losses after the release of the latest U.S. Consumer Price Index for April. The headline CPI rose 2.3% year-over-year, slightly below the 2.4% recorded the previous month and lower than analysts had forecast. Core CPI increased 2.8%, unchanged from March. While inflation hasn’t dropped sharply, the data suggests price pressures may be easing gradually, reviving expectations that the Federal Reserve could cut rates later this year. That pushed gold prices back up more than 1% during the U.S. and European sessions, nearing the $3,250 level.

Still, the possibility of delayed rate cuts remains a headwind. As capital shifts into riskier assets, gold’s near-term appeal is tempered. Some analysts also caution that the recent trade concessions between the U.S. and China may amount to little more than a technical adjustment, without addressing the deeper structural issues. Any sign of stalled progress could quickly reignite demand for safe-haven assets like gold.

From a technical perspective, gold is still holding above its 100-day moving average on the daily chart, signaling that the medium-term uptrend remains intact. However, short-term momentum indicators on the four-hour chart are weak. If prices fail to break convincingly above the $3,265 resistance zone, there’s a risk of a retest of the $3,212 support level, suggesting further volatility ahead.

Key short-term risks include geopolitical tensions and incoming economic data. Markets are watching developments along the India-Pakistan border and the ongoing conflict between Russia and Ukraine. Upcoming U.S. retail sales data and comments from Federal Reserve officials could also sway expectations for future monetary policy, thereby impacting gold’s direction.

(Price data as of New York close on May 13, 2025. For informational purposes only. Please assess investment risks carefully.)