Gold prices experienced a decline, influenced by developments in US-China trade talks and anticipation surrounding upcoming central bank decisions. While short-term pressure exists, gold has demonstrated significant gains year-to-date driven by various factors.
- Gold prices fell more than 1% to around $4,040 per ounce.
- Progress in US-China trade negotiations dampened demand for safe-haven assets.
- Negotiators reached a preliminary agreement on export controls, fentanyl, agricultural purchases, and shipping levies.
- President Trump and President Xi are expected to finalize a deal in South Korea.
- The Federal Reserve is widely expected to cut rates by 25bps.
- The European Central Bank and the Bank of Japan are seen likely to hold their policy rates steady.
- Bullion is up 54% so far this year.
- Factors supporting gold include economic and geopolitical uncertainty, US rate-cut expectations, strong central bank buying, and sustained ETF inflows.
The developments indicate a complex situation for gold. Positive news regarding trade relations tends to reduce its appeal as a safe haven. However, expectations of interest rate cuts and ongoing economic uncertainties provide underlying support. Overall, the asset’s performance is influenced by a combination of macroeconomic factors and geopolitical events.