Gold fell 2.9% to $3,990.89 an ounce at 10:51 a.m. ET (1413 GMT). US gold futures for December fell 3.2% to $4,005.20.
“A potential trade deal between the U.S. and China portends slightly less need for safe havens like gold,” said David Meger, director of metals trading at High Ridge Futures.
Gold climbed to a record high of $4,381.21/oz on October 20, but fell 3.2% last week on indications that trade tensions between the world’s two largest economies would ease. U.S. and Chinese negotiators on Sunday outlined the framework for a deal to pause steeper U.S. tariffs and delay Chinese export controls on rare earths.
US President Donald Trump and China’s Xi Jinping are expected to meet on Thursday to further discuss a trade deal.
In addition to the tech selling, gold is “seeing a further decline due to the easing of trade tensions that had driven prices from $3,800 to $4,400 over the first three weeks of October,” according to CPM Group managing partner Jeffrey Christian. Meanwhile, the market sees a 97% chance of a quarter-percentage point rate cut at Wednesday’s Fed meeting. As a non-yielding asset, gold tends to perform well in a low interest rate environment.
While most analysts and investors see further highs for the yellow metal, with as much as $5,000/oz in sight, some are skeptical about the sustainability of its recent meteoric rise.
Analysts at Capital Economics on Monday lowered their gold price forecast to $3,500/oz by the end of 2026.
“The 25% price increase since August is much harder to justify than previous moves during the gold rally,” the report said.
Silver fell 4.8% to $46.28 an ounce, platinum fell 1.1% to $1,587.92 and palladium lost 2.6% to $1,391.34.
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