Gold prices continued to weaken in Asian trading on Tuesday, deepening their retreat below the $4,000 mark after mounting optimism over progress in U.S.–China trade negotiations eroded investor appetite for safe-haven assets ahead of this week’s Federal Reserve System meeting.
Spot gold fell 0.4% to $3,963.60 an ounce at 01:58 ET (05:58 GMT), while U.S. Gold Futures slid 1% to $3,981.59/oz. The metal lost more than 3% on Monday, hitting its lowest level in over two weeks, and is now down about 10% from its record of $4,381.29/oz set just a week earlier.
U.S.–China trade optimism weighs on gold
The recent pullback came after negotiators from Washington and Beijing struck a preliminary trade framework during talks in Kuala Lumpur over the weekend. The proposal seeks to avert additional tariffs and sanctions and could pave the way for a deal when President Donald Trump meets his Chinese counterpart Xi Jinping later this week.
Optimism over the talks has reduced the need for gold as a geopolitical hedge.
“Even after (Monday’s) correction, gold is still up more than 50% this year, underpinned by strong ETF demand and central bank buying amid diversification,” analysts at ING said in a note.
“The recent price pullback could even be seen by some central banks as a chance to increase their holdings,” they added.
Investors are now turning their attention to the Fed’s two-day policy meeting, which begins later today and is expected to conclude Wednesday with a 25-basis-point rate cut. While lower borrowing costs typically support gold by reducing real yields, much of the expected move appears already priced in, limiting potential near-term upside.
Metals move lower as risk sentiment improves
Other precious and base metals also weakened on Wednesday, reflecting a broader risk-on tone across markets.
Silver Futures fell 0.6% to $46.49/oz, and Platinum Futures dropped 1.6% to $1,556.60/oz. Benchmark Copper Futures on the London Metal Exchange declined 0.6% to $10,948.95 a ton, while U.S. Copper Futures fell 0.8% to $5.12 a pound.
LME copper hit a record $11,052/ton on Monday, buoyed by a tightening supply backdrop and hopes of stronger global trade activity.
“With supply disruptions stacking up and trade optimism growing, the outlook for copper is starting to look brighter,” analysts said.
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