Gold Falls as US-China Trade Progress Weakens Safe-Haven Demand
Gold prices fell in Asian trading on Monday, extending last week’s losses as easing U.S.-China trade tensions reduced demand for safe-haven assets. Traders also awaited an anticipated Federal Reserve interest rate cut later this week.
Spot gold slipped 1.3% to $4,060.80 per ounce by 00:44 ET (04:44 GMT), while U.S. gold futures declined 1.6% to $4,072.60. The metal ended a nine-week winning streak last week as investors took profits after hitting record highs above $4,300 per ounce, fueled earlier by geopolitical concerns and monetary easing expectations.
Gold Drops as Trade Jitters Ease, Risk Appetite Improves
The decline came after U.S. and Chinese negotiators agreed on a preliminary trade framework over the weekend during ASEAN meetings in Malaysia. The deal is expected to be finalized when President Donald Trump and President Xi Jinping meet later this week in South Korea to extend their trade truce and potentially outline a broader agreement.
U.S. Treasury official Scott Bessent confirmed that the threat of a 100% tariff on Chinese goods and China’s planned export control regime had been lifted, signaling reduced trade risks. These developments strengthened risk sentiment, prompting investors to shift from gold to risk assets such as equities.
However, expectations of a Federal Reserve rate cut continued to limit gold’s downside. Markets are pricing in a 25-basis-point rate reduction at the Fed’s October 29 policy meeting, following a softer U.S. inflation report last week.
Lower rates generally support gold prices by reducing the opportunity cost of holding non-yielding assets and weakening the U.S. dollar, which makes bullion cheaper for international buyers.
Precious Metals Dip; Copper Surges to Record High
Other precious metals also retreated on Monday amid a risk-on market tone. Silver futures dropped 1.4% to $47.91 per ounce, while platinum fell 0.9% to $1,587.10 per ounce.
In contrast, copper prices climbed sharply, supported by tight global supply and trade optimism. London Metal Exchange copper jumped more than 1% to a record $11,078 per ton, while U.S. copper futures rose 1.4% to $5.19 per pound. The rally followed supply disruptions at Freeport’s Grasberg mine in Indonesia and renewed hopes for a U.S.-China trade agreement.
