The price of gold drops 3.7% as border tensions between India and Pakistan subside.

The price of gold in India has fallen below Rs 95,000, reaching a one-week low as the yellow metal still faces challenges. Since the truce between India and Pakistan was established, the price of gold has dropped by Rs 3,430 per ten grams. Following the declaration of a truce by both India and Pakistan, tensions at the border appear to have decreased, hence reducing geopolitical tensions in the area.

At Rs 92,631, the current gold rate in India is 3.7% less than the closing price of Rs 96,061 the day before. June contracts for gold futures are down 3.95% at Rs 92,707.

Gold lost ground on global markets as well, as demand for safe-haven assets declined due to optimism around US-China trade negotiations. Gold fell more than three percent to $3,222 on Monday, its lowest level in a week.

Gold sentiment will be further depressed by any favorable developments in the US-China trade agreement. After negotiations in Switzerland over the weekend, the US administration has announced a historic trade deal with China. Additionally, the US Federal Reserve’s decision last week not to lower interest rates has put pressure on gold. Gold prices are under more pressure now that the US dollar has recovered and is back above 100.

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