Gold Prices Fall as U.S.-China Trade Progress Dims Safe-Haven Demand Ahead of Fed Rate Cut

Gold prices declined in Asian trading on Monday, extending last week’s losses as easing U.S.-China trade tensions reduced demand for the metal’s safe-haven appeal. Spot gold dropped 1.3% to $4,060.80 per ounce at 00:44 ET (04:44 GMT), while U.S. gold futures fell 1.6% to $4,072.60. The yellow metal ended its nine-week winning streak last week after touching record highs above $4,300 per ounce, with investors locking in profits amid improving geopolitical sentiment and expectations of monetary easing.

The latest decline followed reports that U.S. and Chinese officials reached a preliminary trade framework during ASEAN meetings in Malaysia. The deal, expected to be finalized later this week when Presidents Donald Trump and Xi Jinping meet in South Korea, signaled a possible extension of the trade truce and a step toward a broader agreement. U.S. Treasury official Scott Bessent noted that the “threat of a 100% tariff has gone away,” easing fears of renewed trade escalation and encouraging risk appetite among investors, which weighed on gold prices.

Despite the dip, losses were limited by growing expectations that the Federal Reserve will cut interest rates by 25 basis points at its October 29 policy meeting. A weaker U.S. CPI report last week reinforced these forecasts, with markets now anticipating further easing through year-end. Lower interest rates typically support gold by reducing the opportunity cost of holding non-yielding assets and weakening the U.S. dollar, making bullion more attractive to global buyers.

Other precious metals also slipped, with silver futures down 1.4% to $47.91 per ounce and platinum futures falling 0.9% to $1,587.10. In contrast, copper surged to a record high of $11,078 a ton on the London Metal Exchange, supported by supply disruptions and optimism over U.S.-China trade progress.