Gold Prices Extend Losses as Trade Optimism Rises Ahead of Fed Decision
Gold prices continued to retreat on Tuesday, falling further after slipping below the key $4,000 per ounce level in the previous session.
Signs of easing U.S.–China trade tensions have reduced demand for the precious metal’s safe-haven appeal, just as investors await the outcome of this week’s Federal Reserve meeting.
At 08:45 ET (12:45 GMT), spot gold fell 1.6% to $3,920.77 per ounce, while U.S. gold futures dropped 2.1% to $3,934.51 per ounce. The yellow metal declined more than 3% on Monday, hitting its lowest level in over two weeks. Gold prices are now down roughly 10% from last week’s record high of $4,381.29.
Easing U.S.–China Tensions Pressure Gold Demand
The recent selloff followed reports that negotiators from Washington and Beijing reached a preliminary trade framework during talks in Kuala Lumpur over the weekend.
The deal aims to prevent a new wave of tariffs and sanctions and could pave the way for a major breakthrough when U.S. President Donald Trump meets Chinese President Xi Jinping later this week.
Optimism over the trade talks has weighed on bullion’s demand as investors move away from safe-haven assets.
“Even after Monday’s correction, gold remains up more than 50% this year, supported by strong ETF inflows and central bank buying,” analysts at ING said. “The recent dip may even attract more central bank purchases,” they added.
Focus Shifts to the Federal Reserve Meeting
Investors are now watching the Federal Reserve’s policy meeting, which begins Tuesday and concludes Wednesday. The market widely expects a 25 basis-point rate cut.
While lower rates typically boost gold by reducing real yields, analysts note that most of the dovish move is already priced in, limiting near-term upside for the metal.
Copper and Other Metals Pull Back
Other precious and industrial metals also fell on Tuesday amid a broader risk-on sentiment in global markets.
Silver futures dropped 0.6% to $46.455 per ounce, while platinum slid 2.1% to $1,550.45 per ounce.
Copper futures on the London Metal Exchange slipped 0.6% to $10,952.95 per ton, and U.S. copper futures declined 0.7% to $5.1348 per pound after hitting a record high of $11,052 per ton on Monday.
“With supply disruptions mounting and trade optimism improving, the outlook for copper is turning more positive,” ING analysts said.
