Gold price (XAU/USD) maintains its offered tone through the Asian session on Monday and currently trades below the $3,300 round-figure mark, down 0.75% for the day. Despite mixed signals from the US and China, investors remain hopeful over the potential de-escalation of tensions between the world's two largest economies. Moreover, a fall in China's gold consumption in the first quarter of 2025 turns out to be a key factor undermining demand for the traditional safe-haven bullion.

Meanwhile, prospects for more aggressive policy easing by the Federal Reserve (Fed) fail to assist the US Dollar (USD) to build on last week's strong recovery gains from a multi-year low – marking its first weekly gain since March. This, along with trade-related uncertainties and persistent geopolitical risks help limit further losses for the Gold price. Hence, it will be prudent to wait for strong follow-through selling before positioning for any meaningful corrective decline from the all-time peak.
Gold price bulls remain on the sidelines amid hopes for a potential US-China trade deal
China has exempted some U.S. imports from its 125% tariffs imposed earlier this month in response to the 145% US tariffs on Chinese imports. This comes on top of US President Donald Trump's reassertion that trade talks were underway with China and fuels hopes for a quick de-escalation of trade war between the world's two largest economies.
China has yet to confirm any exemptions and denies ongoing tariff talks. Meanwhile, Trump's shifting announcements and global recession fears sustain demand for the safe-haven Gold price.
The China Gold Association said on Monday that the country's gold consumption fell 5.96% year-on-year to 290.492 tonnes in the first quarter of 2025. Moreover, high prices continued to curb demand for gold jewelry, which slumped 26.85% year-on-year to 134.531 tonnes. Meanwhile, consumption of gold bars and coins surged 29.81% to 138.018 tonnes.

Source: fxstreet