Gold prices slipped for a second straight session on Monday, as signs of easing U.S.–China trade tensions reduced demand for safe-haven assets. The metal extended last week’s pullback from record highs, as investors shifted toward riskier markets ahead of the Federal Reserve’s policy meeting later this week.
Spot gold fell 1.3% to $4,060.80 per ounce by 00:44 ET (04:44 GMT), while U.S. gold futures dropped 1.6% to $4,072.60. The decline follows a sharp retreat from last week’s all-time high above $4,300 per ounce, which capped a nine-week winning streak.
The reversal comes as U.S. and Chinese negotiators reached a preliminary trade framework during ASEAN meetings in Malaysia, signaling de-escalation in a conflict that had fueled safe-haven flows for months.
“The threat of the 100% tariff has gone away, as has the threat of China initiating a global export control regime,” said Scott Bessent, a U.S. Treasury official. “The likelihood of renewed escalation appears low.”
That tone sparked a risk-on rally across equities and commodities, tempering gold’s appeal as investors rotated into higher-yielding assets.
Fed Rate Cut Bets Limit Gold’s Downside
While the improved trade outlook dampened haven demand, expectations of a Fed rate cut later this week helped limit deeper losses. Traders now anticipate a 25-basis-point reduction at the October 29 meeting, following a weaker-than-expected U.S. CPI report last week.
Lower interest rates typically support gold by reducing the opportunity cost of holding non-yielding assets and pressuring the U.S. dollar, which makes bullion cheaper for overseas investors.
- Spot Gold: $4,060.80 (–1.3%)
- U.S. Gold Futures: $4,072.60 (–1.6%)
- Expected Fed cut: 25 basis points
- Next key level: $4,000 support zone
Still, analysts caution that the current pullback could extend if optimism surrounding U.S.–China negotiations continues through this week’s Trump–Xi meeting in South Korea, where a final trade agreement may be announced.
Precious Metals Mixed; Copper Hits Record
Other metals followed gold lower on Monday, though industrial commodities benefited from the improved trade outlook.
Silver futures dropped 1.4% to $47.91 per ounce, and platinum futures slipped 0.9% to $1,587.10. In contrast, copper surged to a record high, driven by tight supply and optimism over global trade recovery.
- Copper (LME): $11,078.00 per ton (+1%)
- U.S. Copper Futures: $5.19 per pound (+1.4%)
The rally in copper was supported by the ongoing shutdown of Freeport’s Grasberg mine in Indonesia, tightening global supply, while hopes of a U.S.–China trade truce further boosted the red metal’s demand outlook.