Gold Retreats From Record Highs as Easing Trade Tensions Curb Safe-Haven Demand
Gold prices pulled back on Tuesday, slipping from record highs as investors took profits and optimism over U.S.–China trade negotiations reduced demand for the traditional safe-haven asset.
At 09:20 ET (13:20 GMT), spot gold fell 3.4% to $4,201.65 per ounce, retreating from Monday’s all-time high of $4,381.21. Meanwhile, U.S. gold futures for December declined 0.5% to $4,217.25 per ounce after a week-long rally that had driven the metal to record levels.
Trade Optimism and Political Calm Weigh on Gold
The pullback came as U.S. President Donald Trump adopted a more conciliatory tone toward China, expressing confidence in reaching a “strong and fair” trade deal with President Xi Jinping at next week’s South Korea summit.
In a related development, Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng in Malaysia later this week. This follows renewed tensions after Washington’s threat to impose 100% tariffs on Chinese imports starting November 1.
Additionally, White House economic adviser Kevin Hassett said the U.S. government shutdown is likely to end soon, with bipartisan negotiators close to a funding agreement.
These developments have eased political uncertainty, prompting investors to move away from defensive holdings like gold.
Analysts Warn Gold’s Rally May Be Overextended
According to John Higgins, Chief Markets Economist at Capital Economics, gold’s meteoric rise may soon lose momentum.
He cautioned that the metal’s price has far exceeded its fair value, suggesting it could be entering bubble territory.
Higgins noted that gold has now outperformed both inflation and other real assets by a wide margin.
“At the start of 2025, gold was already near its inflation-adjusted peak from 1980,” he said. “Today, its real price is about 60% higher than that historic level and more than three times its long-term average.”
Other Metals Decline as Dollar Strengthens
Broader metal markets also weakened on Tuesday as a stronger U.S. dollar made commodities more expensive for international buyers.
Silver futures dropped 4.8% to $48.95 per ounce, while platinum fell 5.3% to $1,565.10 per ounce.
Copper prices slipped as well — London Metal Exchange futures edged down 0.6% to $10,624 per ton, and U.S. copper futures declined 1.1% to $4.9803 per pound.
