WASHINGTON (dpa-AFX) - Gold fell sharply on Friday, slipping to a nearly one-month low as investors move to riskier assets amid a backdrop of easing geopolitical tensions.
Front Month Comex Gold for July plunged $60.20 (or 1.8%) to $3,273.70 per troy ounce today. Gold lost around 2.9% this week.
Front Month Comex Silver for July fell 55.40 cents (or 1.5%) today to $36.037 per troy ounce.
In a significant trade development today, the world's two major economic partners, the US and China, made further progress on the trade agreement announced by the countries last month in Geneva. Specifically, China has agreed to deliver much-needed rare earth minerals to the US.
A White House official said the US and China have agreed to 'an additional understanding of a framework to implement the Geneva agreement.'
A spokesperson for China's Ministry of Commerce subsequently said the two sides have 'confirmed the details of the framework.'
The spokesperson said Washington would lift 'restrictive measures,' while Beijing would 'review and approve' items under export controls.
US Commerce Secretary Howard Lutnick told Bloomberg that 10 other deals with multiple other countries are coming up, suggesting a shift from the previous rigid stance on trade policies.
This news brought cheers to investors across the world, triggering a rally in the US financial markets and leading to a slump by gold.
On the data front, according to the numbers released by the US Commerce Department, consumer spending that accounts for more than two-thirds of economic activity edged down 0.1% last month to $21.441 trillion, suggesting the dent on consumer's appetite brought on by tariffs.
The Commerce Department also said personal income fell by 0.4 percent in May after climbing by a downwardly revised 0.7 percent in April.
Additionally, the report said the personal consumption expenditures (PCE) price index inched up by 0.1 percent in May, matching the uptick seen in April as well as economist estimates.
The annual rate of growth by the PCE price index accelerated to 2.3 percent in May from 2.2 percent in April, which also matched expectations.
Meanwhile, the core PCE price index, which excludes food and energy prices, rose by 0.2 percent in May after inching up by 0.1 percent in April. Economists had expected another 0.1 percent uptick.
The annual rate of growth by the core PCE price index also accelerated to 2.7 percent in May from an upwardly revised 2.6 percent in April.
Economists had expected annual rate of growth by the core PCE price index to tick up to 2.6 percent from the 2.5 percent originally reported for the previous month.
Following today's inflation data, all eyes are on the Fed's decision on interest rates in the coming weeks.
Interest rates have been kept unchanged by the Fed 4.25% to 4.50% since December. High interest makes gold less favorable.
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