WASHINGTON (dpa-AFX) - Gold prices tumbled on Monday as the dollar rose against major currencies and equities gained in strength, as worries about trade eased after the U.S. and China agreed to resume trade talks.
Following the meeting between the U.S. President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Japan on Saturday, the two countries have decided to resume trade negotiations and to not impose additional tariffs on each other's products.
Global equities surged higher as risk appetite increased and the dollar gained against major currencies, rendering the yellow metal quite weak.
The dollar index jumped to 96.87, gaining about 0.75%.
Gold futures for August ended down $24.40, or 1.7%, at $1,389.30 an ounce, recording the biggest single-session loss in about a year.
On Friday, gold futures for August ended up $1.70, or 0.1%, at $1,413.70 an ounce, the highest settlement in six years. For the week, gold futures added about 1%.
Gold futures gained over 7.7% in June, the best monthly returns in about three years.
Silver futures for September ended down $0.148, at $15.193 an ounce, while Copper futures for September settled lower by $0.0255, at $2.6880 per pound.
Following the decision to call truce, the Unites States agreed to put off additional tariffs on Chinese goods indefinitely while removing some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S.
In response, China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.
China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media reported on Sunday after the two sides said they would continue talks.
'Things are still very much up in the air,' the official China Daily said in an editorial.
Trump told reported that his meeting with Xi was 'excellent, as good as it was going to be' and 'we're right back on track.'
In his closing G20 press conference, Trump revealed that he will not follow through on threats to raise tariffs on all remaining Chinese imports 'at least for the time being.'
Trump noted that existing tariffs on Chinese imports will remain in place, suggesting the U.S.-China trade dispute could still act as headwind to the global economy unless the conflict is eventually resolved.
'The quality of the transaction is far more important to me than speed,' Trump said in a post on Twitter. 'I am in no hurry, but things look very good!'
In economic news, a report from the Institute for Supply Management showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of June.
The ISM said its purchasing managers index edged down to the lowest level since October 2016, falling to 51.7 in June after slipping to 52.1 in May. Economists had expected the index to dip to 51.0.
Meanwhile, a report from the Commerce Department said construction spending slid by 0.8% to an annual rate of $1.294 trillion in May after climbing by a revised 0.4% to a rate of $1.304 trillion in April.
Economists had expected construction spending to remain roughly flat after the data originally reported for the previous month showed spending was virtually unchanged.
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