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Safe-haven Gold falls 2% as tensions between the US and China ease

Gold dropped 2% on Friday, reaching a low of about one month, after the U.S. China trade agreement increased risk appetite, and diminished gold's appeal as an asset that is a safe haven.

Gold spot fell 2%, to $3.261.28 an ounce at 0934 am EDT (1334 GMT) - its lowest price since May 29. Bullion has fallen 3.2% for the second week in a row.

U.S. Gold Futures fell 2.2% to $3.272.90.

The slowdown in geopolitics is a great opportunity for investors, because they can start making money now. This is due to the prospect of a kinetic war between China and the Middle East.

The markets viewed the agreement reached between the U.S.A. and China Thursday regarding the expedited shipment of rare earths to the U.S. as a positive development. Global shares rose after this.

The ceasefire agreement in the Middle East between Iran and Israel has held up despite a few initial skirmishes.

The data show that U.S. consumers' spending fell unexpectedly in May, as the benefit of pre-emptive purchases of motor vehicles before tariffs began to fade, and monthly inflation remained modest.

After the data, traders increased their bets that the Federal Reserve would lower the short-term borrowing rates by 75 basis point in 2025. This is most likely to begin in September.

Pavilonis said that the data doesn't move the needle in gold because it is experiencing a sell-off due geopolitics.

Gold's non-yielding properties make it less attractive to investors in a stable geopolitical or economic environment.

Spot silver fell 2%, to $35.88. It was expected to continue to decline for the rest of the week.

Palladium dropped 0.8% to $1.122.77 but was on track for a weekly gain. Platinum fell 6.5% to $1.325.48, but was on track for a fourth straight weekly gain. (Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)

(source: Reuters)