Gold prices fell on Monday as global markets rallied on signs of progress in US–China trade talks, denting demand for the metal’s safe-haven appeal ahead of an expected Federal Reserve rate cut later this week.
Spot gold was trading at $4,040.50 an ounce by 09:43 GMT.
The retreat follows a week of declines, with traders rotating into risk assets after Washington and Beijing reached a preliminary framework for a trade agreement over the weekend at the ASEAN meetings in Malaysia.
US President Donald Trump said he expected a deal with China, calling recent talks “very positive,” as Treasury Secretary Scott Bessent and Vice Premier He Lifeng concluded two days of discussions. The two leaders are due to meet in South Korea on Thursday to finalise details.
The easing trade tensions lifted equities globally and curbed demand for safe-haven assets such as gold. However, losses were limited by growing expectations that the Federal Reserve will cut interest rates at its 29 October meeting following last week’s softer-than-expected inflation print.
A 25-basis-point cut is widely priced in, and markets will be watching for clues on whether the Fed plans to extend its easing cycle into year-end. Lower interest rates generally support gold by reducing the opportunity cost of holding the metal and weakening the US dollar, making it more attractive to foreign buyers.