Gold prices plunge by over $100 as US, China slash tariff rates; touch Rs 95,930 per 10 gm in India
Gold prices tumbled on Monday, May 12, 2025, as news broke of a new tariff agreement between the U.S. and China. This significant development has sparked a shift in investor sentiment, leading to sharp declines in top gold mining stocks like Newmont Corporation (NEM) and Barrick Gold (ABX).
Gold Prices Fall as Risk Appetite Grows
Following the announcement that the U.S. and China will suspend tariffs on each other’s goods for 90 days, investors began moving away from safe-haven assets like gold. Instead, they showed renewed interest in riskier investments, including equities.
- Gold futures (GC00) dropped 3.1%, falling to $3,240 per Troy ounce.
- This marks gold’s lowest price since April 10, reversing recent upward momentum.
The market shift was swift and significant, affecting both gold prices and gold-related equities.
Newmont Stock Drops After Strong Rally
Shares of Newmont Corporation, one of the world’s leading gold mining companies, fell sharply in reaction to the news.
- Newmont stock (NEM) declined 4.8%, closing at $51.38.
- This pullback comes after a 45% gain in 2025, driven by investor demand for safe-haven assets earlier in the year.
The decline highlights the sensitivity of gold mining stocks to global economic developments, especially those tied to trade and tariffs.
Other Gold Mining Stocks Also Hit
Newmont wasn’t alone in the selloff. Other major gold mining stocks also saw notable losses:
- Barrick Gold (ABX) fell 5.2%
- Agnico Eagle Mines dropped 8.2%
These losses reflect broader investor sentiment shifting away from gold as the perceived risks in global trade decline—at least for now.
Why the U.S.-China Tariff Deal Matters
The agreement, announced by U.S. Treasury Secretary Scott Bessent following weekend talks in Switzerland, signals a temporary easing of trade tensions between the two largest global economies.
Key highlights of the agreement:
- A 90-day suspension of existing tariffs on both sides
- A continued commitment to dialogue on future trade cooperation
This development sparked optimism in equity markets:
- Dow Jones Industrial Average jumped 2.4%
- S&P 500 Index surged 2.6%
As investors gain confidence in the stability of international trade, demand for gold—traditionally a hedge against uncertainty—has decreased.
What This Means for Investors in Gold and Mining Stocks
If the U.S.-China relationship continues to improve, we could see ongoing pressure on gold prices and mining stock performance in the short term. However, it’s essential to remember that geopolitical risks, inflation concerns, and central bank policies still play significant roles in gold market dynamics.
Short-Term Outlook:
- Lower gold prices could persist as investor focus shifts to equities.
- Gold mining stocks may remain volatile in response to further trade or economic news.
Long-Term Considerations:
- Safe-haven demand may return if global uncertainty rises again.
- Investors should watch inflation trends and central bank interest rate policies closely.
Conclusion: Stay Informed Before Investing in Gold Stocks
The latest tariff news has clearly impacted gold prices and mining stock valuations. While Newmont and its peers have enjoyed strong gains in 2025, market conditions can change rapidly based on global economic events.
📌 Key Takeaway:
Investors should keep a balanced perspective, understanding that while trade deals may ease pressure in the short term, gold remains a vital asset in diversified portfolios during uncertain times.
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