Mubasher: Gold prices tumbled on Monday, recording the lowest level in more than a week as the dollar strengthened, while demand for riskier assets was fuelled by an agreement between the US and China to restart talks, according to Reuters.

By 10:45 am GMT, spot gold fell by 1.40% to $1,389.75 pb, while US gold futures dropped by 1.45% to $1,393.20 pb.

“Reopening of trade talks between US-China has made investors look back at growth, we are seeing good support for the share markets across the region and safe-havens are in less demand,” CMC Markets chief strategist Michael McCarthy was quoted by Reuters.

It is worth noting that gold climbed to $1,438.63 per ounce, marking the highest level since 14 May 2013, as the dollar weakened and risk-off sentiment was boosted by worries about the escalation of the row between the US and Iran.

However, investors grew optimistic about news that US President Donald Trump offered concessions, including levying no fresh tariffs and loosening restrictions on tech giant Huawei.

The breakthrough was made in a meeting between President Trump and his Chinese counterpart Xi Jinping on the sidelines of the Group of 20 nations (G20), which in return has lifted financial markets and capped the safe-haven appeal of the yellow metal.

Adding to the pressure was a stronger US dollar, with the index jumping to its highest level more than a week on Monday, making the non-yielding bullion more expensive for holders of the non-US currency.

By 10:50 am GMT, the US dollar index, a tracker for the greenback against six major rivals, rose by 0.39% to 96.50.

Nevertheless, the world’s two biggest economies could still be having a long way ahead before they can hammer out a deal to end their crippling trade conflict, as per indicated in Chinese state media outlets.

“Although the downwards price reaction in gold to the trade deal seems to be logical, we do think the jury is still not out just yet on the ultimate result,” a note by INTL FCStone analyst Edward Meir was quoted by Reuters.