Gold drops as easing China-U.S. trade tensions curb demand

The decline comes as Chinese and U.S. negotiators reached a preliminary trade framework over the weekend on the sidelines of ASEAN meetings in Malaysia

Gold prices slipped in Asian trading on Monday, extending losses from last week as easing China-U.S. trade tensions eroded bullion’s safe-haven demand.

Spot gold slid 1.3% to $4,060.80 per ounce by 04:44 GMT.

The yellow metal snapped a nine-week winning streak last week as traders took profits following record highs above $4,300/oz driven by geopolitical concerns and expectations of monetary easing by central banks globally.

The decline comes as Chinese and U.S. negotiators reached a preliminary trade framework over the weekend on the sidelines of ASEAN meetings in Malaysia.

The framework is expected to be finalized when Chinese President Xi Jinping and U.S. President Donald Trump meet later this week in South Korea to extend the trade truce and potentially lay the groundwork for a broader accord.

The threat of the 100% tariff has gone away, as has the threat of the Chinese initiating a worldwide export control regime, said U.S. Treasury official Scott Bessent, suggesting that the risk of renewed trade escalation had eased.

These developments boosted appetite for risk assets, weighing on gold’s safe-haven appeal.

Still, losses in gold were capped by expectations that the U.S. central bank would cut interest rates at its Oct. 29 policy meeting.

Lower interest rates tend to support gold by reducing the opportunity cost of holding non-yielding assets and putting downward pressure on the U.S. currency, making bullion cheaper for holders of other currencies.

Other precious metals also traded lower on Monday, pressured by the broader risk-on mood.

Silver Futures declined 1.4% to $47.91 per ounce, while Platinum Futures dropped 0.9% to $1,587.10/oz.