Gold prices fell on Tuesday morning, after US president Donald Trump delayed raising tariffs on the European Union (EU), easing concerns about trade tensions.
Trump said in a social media post on Friday that the EU had been “very difficult to deal with” and was recommending that tariffs on imports from the bloc be raised to 50% from 1 June.
Following a conversation on Sunday between Trump and European Commission president Ursula von der Leyen, the US president then said he would delay imposting the 50% levies until 9 July.
UK and US markets were closed on Monday for public holidays but other stock markets rose on the news of a delay, with the pan-European STOXX 600 (^STOXX) gaining 0.9% in the session.
Read more: FTSE 100 LIVE: London higher as markets catch up on Trump EU tariff pause
The UK's FTSE 100 (^FTSE) advanced 0.6% shortly after the market open on Tuesday morning, while US stock market futures jumped, as the postponing of levies on the EU bolstered investor optimism.
Gold prices declined on Tuesday morning as stocks rose, signaling investors' pivot back into risk assets away from the precious metal, which is considered to act as a safe haven amid economic and geopolitical uncertainty.
Gold futures (GC=F) were down 1.7% at $3,307.80 per ounce at the time of writing, while the spot gold price fell 1% to $3,308.48 per ounce.
Richard Hunter, head of markets at Interactive Investor, said: “It remains to be seen as to when investors, businesses and consumers grow weary of needing to react slavishly to every tariff pronouncement, if they have not already.
“The constant back and forth has made planning all but impossible, and many companies over the recent quarterly reporting season have opted not to give outlook figures as a result of the ever-changing goalposts.”
Oil prices were also down on Tuesday morning, as investors looked ahead to a potential output hike announcement from the Organization of the Petroleum Exporting Countries and their allies – known as OPEC+.
Bloomberg reported last week that members of OPEC+ were discussing making a third consecutive increase in output, with a decision set to be made at the group's meeting on 1 June.
Brent crude futures (BZ=F) fell 0.3% to $63.98 a barrel on Tuesday morning, while West Texas Intermediate futures (CL=F) declined 0.4% at $61.29 a barrel.
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Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “As expectations rise for further trade deals to be inked in the coming months, worries about global growth have eased a little. This has helped keep oil prices steady, given there should be higher demand for energy, if trade deals mean factories, cargo ships and trucks can keep shifting goods.”
