Gold Retreats on US-China Trade Truce, But Long-Term Haven Demand Remains Intact

Gold prices experienced significant volatility this week, plunging over $130 from last week’s close, marking the second-largest price washout of the year and the third-largest on record. The catalyst was a surprise truce in the US-China trade conflict, where both sides dramatically lowered tariffs—China from 145% to 30% and the US from 125% to 10%—defying expectations. This 90-day tariff freeze, which effectively resets trade relations until at least August 9, signals a de-escalation, prompting risk assets and the US dollar to rally while safe havens like gold took a hit. 

Technically, gold held the $3,200 level for the third time, previously acting as a bear trap that led to sharp $300+ rallies. Short-term resistance lies at $3,300, the gap from the weekend open. However, if $3,200 fails, gold could face deeper corrections, especially with risk-on sentiment improving. Notably, Chinese gold positioning (SGE, SHFE, ETFs) is at all-time highs, while Western speculators remain underweight, signaling Asia as the price driver. 

Silver remained resilient, supported above $32/oz, while platinum group metals (PGMs) declined alongside gold despite a broader commodity bid, fueled by improved 2025 GDP forecasts and rising oil prices. The gold/silver ratio dropped below 100, a shift driven by gold’s volatility rather than silver’s strength. 

While this trade truce has pressured gold in the short term, structural concerns around US reliability, ongoing global rebalancing, and long-term liquidity support continued investor interest. Gold remains vulnerable near-term but fundamentally underpinned long-term by haven demand and monetary uncertainty.