Gold slips below USD 4,000 per ounce as US-China trade progress cools safe-haven demand

Gold prices fell below USD 4,000 per ounce on Monday as signs of a thaw in US-China trade tensions reduced some of the bullion’s safe-haven appeal, while market participants awaited the US Federal Reserve’s interest rate decision this week.

Spot gold was down 2.7% at USD 4,002.29 per ounce at 1:45 p.m. ET (1745 GMT). Prices fell to USD 3,970.81 per ounce earlier in the session, their lowest since October 10.

US gold futures for December delivery fell 2.9% to settle at USD 4,019.70.

“A potential US-China trade deal portends a little less need for safe-haven assets such as gold,” said David Meger, director of metals trading at High Ridge Futures.

Gold climbed to a record high of USD 4,381.21/oz on October 20, but retreated 3.2% last week following hints of easing trade tensions between the world’s two largest economies. Negotiators from the US and China on Sunday outlined the framework for a deal to pause steeper American tariffs and defer China’s rare-earth export controls.

US President Donald Trump and China’s Xi Jinping are expected to meet on Thursday to further discuss a trade accord.

In addition to technical selling, gold is “seeing a further decline because of an unwinding of trade tensions that had taken prices from USD 3,800 to USD 4,400 over the course of the first three weeks of October,” said CPM Group managing partner Jeffrey Christian.

Meanwhile, the market sees a 97% chance of a quarter of a percentage point rate cut at the Fed’s meeting on Wednesday.

Gold, a non-yielding asset, typically performs well in a low-interest-rate environment.

While most analysts and investors see further highs for the yellow metal, even bringing USD 5,000/oz into view, some are skeptical about the sustainability of its recent huge rise.

Capital Economics analysts on Monday lowered their gold price forecast to USD 3,500/oz for end-2026.

“The 25% jump in prices since August is much more difficult to justify than previous moves during the gold rally,” it said.

Spot silver fell 3.6% to USD 46.85 per ounce, platinum eased 0.4% to USD 1,592.03, and palladium lost 1.8% to USD 1,402.98.

(Reporting by Anjana Anil and Pablo Sinha in Bengaluru; Editing by Mark Potter and Richard Chang)