Gold falls below $4,000 as demand drops

Spot gold was down 2.7% at $4,002.29 per ounce

Gold prices dropped below $4,000 per ounce on Monday as signs of a thaw in U.S.-China trade tensions reduced some of the bullion’s safe-haven appeal, while market participants awaited the U.S. central bank’s interest rate decision this week.

Spot gold was down 2.7% at $4,002.29 per ounce at 1745 GMT. Prices dropped to $3,970.81 per ounce earlier in the session, their lowest since October 10.

A potential U.S.-China trade deal portends a little less need for safe-haven assets such as gold, said David Meger, director of metals trading at High Ridge Futures.

Gold jumped to a record high of $4,381.21/oz on October 20, but declined 3.2% last week following hints of easing trade tensions between the world’s two largest economies. Negotiators from China and the U.S. on Sunday outlined the framework for a deal to pause steeper American tariffs and defer China’s rare-earth export controls.

Chinese President Xi Jinping and U.S. President Donald Trump are expected to meet on Thursday to further discuss a trade accord.

In addition to technical selling, gold is seeing a further decline because of an unwinding of trade tensions that had taken prices from $3,800 to $4,400 over the course of the first three weeks of October, said CPM Group managing partner Jeffrey Christian.

While most analysts and investors see further highs for the yellow metal, even bringing $5,000/oz into view, some are sceptical about the sustainability of its recent huge rise.

Capital Economics analysts on Monday lowered their gold price forecast to $3,500/oz for end-2026.

The 25% jump in prices since August is much more difficult to justify than previous moves during the gold rally, it said.