Gold prices fell on Monday as easing geopolitical tensions shifted investor focus to a pivotal week of US inflation data.
Spot Gold (XAU/USD) traded at $3,364.47 an ounce by 09:30 GMT, extending the decline seen late last week. The retreat came as President Donald Trump prepared to meet Russian President Vladimir Putin in Alaska on 15 August in a bid to end the war in Ukraine.
Trump’s deadline for Russia to reach a peace deal passed without harsher US sanctions, cooling immediate market concerns. His suggestion of a “territory swap” in Donbas was rejected by Kyiv and met with caution from European leaders.
With geopolitical risk premium fading, attention has turned to Tuesday’s US Consumer Price Index reading, a key summer event for markets, followed by Producer Price Index data later in the week. Traders are weighing whether inflation will reinforce expectations for a Federal Reserve rate cut in September, currently priced at around 90% following weak jobs data earlier this month.
The US-China tariff truce, set to expire on 12 August, adds another variable to market sentiment. While investors remain hopeful for an extension, the outcome is far from guaranteed.