Gold prices continued to retreat in Asian trading on Tuesday, falling further below the $4,000 per ounce mark as easing U.S.–China trade tensions diminished the metal’s safe-haven allure. Spot gold slipped 0.4% to $3,963.6/oz by 01:58 ET (05:58 GMT), while U.S. gold futures declined 1% to $3,981.59/oz.
The yellow metal has dropped nearly 10% from its record high of $4,381.29/oz reached just last week, marking one of its sharpest short-term corrections this year. On Monday, gold fell more than 3%, touching a two-week low. Analysts say profit-taking and reduced geopolitical uncertainty have both pressured prices.
Market participants now await the Federal Reserve’s policy decision, which concludes on Wednesday. A widely expected 25-basis-point rate cut could influence near-term sentiment, although much of the move appears already priced in.
Trade Progress Dampens Haven Appeal
The latest decline in gold follows encouraging signs from U.S.–China trade negotiations held in Kuala Lumpur over the weekend. Officials from both nations reportedly reached a preliminary trade framework aimed at avoiding further tariffs and sanctions. The agreement could pave the way for a breakthrough when President Donald Trump meets President Xi Jinping later this week.
As optimism over trade improves, investor demand for traditional safe havens such as gold has softened. According to analysts at ING, “Even after Monday’s correction, gold is still up more than 50% this year, supported by strong ETF inflows and persistent central-bank buying.”
They added that the recent dip might encourage some central banks to increase reserves, viewing it as an opportunity to diversify at lower prices.
Key factors weighing on gold:
- U.S.–China trade optimism reducing geopolitical risk.
- Anticipation of a Fed rate cut limiting upside momentum.
- Central-bank demand stabilizing after record inflows earlier in the year.
Broader Metals Market Turns Lower
The weakness extended across the broader metals complex. Silver futures fell 0.6% to $46.49/oz, while platinum futures dropped 1.6% to $1,556.60/oz.
In industrial metals, London Metal Exchange (LME) copper eased 0.6% to $10,948.95 per ton, and U.S. copper futures dipped 0.8% to $5.12 per pound, retreating from Monday’s record high of $11,052/ton.
Analysts noted that while copper prices have cooled slightly, the medium-term outlook remains firm as supply disruptions tighten and global manufacturing sentiment improves.
As the Fed’s decision looms and trade optimism builds, markets are recalibrating expectations for both growth and inflation—leaving gold investors watching closely to see whether the metal can stabilize above key technical support near $3,950/oz.