Gold prices drop below $4,000 as US-China trade hopes lift investor sentiment
Gold prices continued to decline on Tuesday morning, falling below the $4,000 mark as signs of progress in trade talks between the United States and China eased investor demand for safe-haven assets, Kazinform News Agency correspondent reports.
Gold futures dropped by 2.2% to $3,931.80 per ounce, while spot gold fell 1.7% to $3,915.21. The decline follows Monday’s losses, when the metal briefly touched $3,970.81, which was its lowest level since October 10.
The downward trend comes as expectations rise for a potential breakthrough in US-China trade negotiations. President Donald Trump expressed optimism ahead of his upcoming meeting with Chinese President Xi Jinping, scheduled to take place in South Korea on Thursday. Speaking to reporters aboard Air Force One, Trump said he believed the two sides could “come away with a deal.”
Analysts say that optimism surrounding the talks has reduced investor appetite for gold, as hopes of a trade truce lessen the need for traditional safe-haven assets. Gold prices had reached a record high of $4,381.21 per ounce on October 20 but have since retreated more than 3% as tensions between Washington and Beijing began to ease.
Reports indicate that negotiators finalized a framework agreement on Sunday that would suspend planned US tariff increases and delay China’s export restrictions on rare earth minerals. Traders are now closely watching the US Federal Reserve’s upcoming interest rate decision, expected later this week, for further direction in the precious metals market.
Earlier, it was reported that central banks around the world continue to show strong demand for gold, viewing it as a key hedge against geopolitical and economic risks.
