Gold fell to around 4,040 US dollars per ounce on Monday, down 1.73 percent, as optimism over progress in US China trade negotiations reduced demand for safe haven assets ahead of major central bank meetings this week.
Gold prices declined after rising 5.41 percent over the past month and 47.23 percent compared to the same time last year. The drop followed weekend talks in Malaysia where US and Chinese officials reached a framework agreement averting potentially ruinous 157 percent tariffs on Chinese goods.
The preliminary framework covers export controls, fentanyl cooperation, agricultural purchases, and shipping levies. US Treasury Secretary Scott Bessent described the first day of discussions as very constructive, setting a positive tone before President Donald Trump and Chinese President Xi Jinping meet in South Korea later this week.
The easing geopolitical tension reduced appeal for traditional safe haven assets like gold. Meanwhile, investors turned attention to central bank meetings this week. The US Federal Reserve is widely expected to cut interest rates by 25 basis points, with futures traders pricing in a 98.3 percent probability of a reduction to a range of 3.75 percent to 4.0 percent.
“We expect hawks to support the cut but would not be surprised if Kansas City Fed President Jeffrey Schmid or St. Louis Fed President Alberto Musalem dissented,” Barclays economists said. The European Central Bank and Bank of Japan are both likely to keep their policy rates steady.
Gold hit an all-time high of 4,380.89 dollars per ounce earlier in October, underscoring strong investor appetite despite short term pullbacks. The metal rose for nine straight weeks while hitting successive records before the recent decline.
Analysts say gold’s near term direction will depend on whether risk sentiment continues to improve or if traders seek safety again ahead of central bank decisions.
Source: newsghana.com.gh
