02:00 PM EDT, 05/12/2025 (MT Newswires) -- Gold traded sharply lower mid-afternoon on Monday as the dollar surged after the United States and China reached an agreement to lower tariffs on each other's exports.

Gold for June delivery was last seen down US$115.40 to US$3.228.60 per ounce.

The drop after the world's two largest economies declared a 90-day ceasefire of sorts in their tariff battle. Following weekend talks, President Donald Trump said the United States will roll back tariffs on Chinese imports to 30% from 145%, while China is cutting its levy on U.S. imports to 10% from 125%.

Investors moved to risk following the agreement and away from gold's safe-haven, with U.S. stock markets sharply higher. The dollar was also sharply higher, bearish for commodities priced in the currency. The ICE dollar index was last seen up 1.57 points to 101.92.

"Gold ... faced significant headwinds, retreating from earlier highs above USD 3,400 down to nearly USD 3,200 as easing geopolitical fears and stronger economic optimism diminished safe-haven appeal," Saxo Bank noted.

Treasury yields were also sharply higher, with the U.S. two-year note last seen up 10.2 basis points to 4.012%, while the 10-year note was paying 4.456%, up 6.7 points.