Gold prices continued to fall in Asian trading on Tuesday after dropping below $4,000 an ounce in the previous session, as signs of easing trade tensions between the US and China reduced the appeal of bullion as a safe haven ahead of a closely watched Federal Reserve meeting, UNN reports with reference to Investing.com.
Details
Spot gold was last down 0.4% at $3963.6 an ounce by 01:58 AM ET (05:58 GMT), while US gold futures fell 1% to $3981.59 an ounce.
On Monday, the yellow metal fell more than 3% to a more than two-week low. Prices have fallen about 10% from a record high of $4381.29 an ounce reached just a week earlier. Easing US-China tensions are curbing demand for bullion.
The sharp decline came after negotiators from Washington and Beijing reached a preliminary trade framework during talks in Kuala Lumpur last weekend.
The proposal aims to prevent a new round of tariffs and sanctions and could pave the way for a breakthrough when US President Donald Trump meets with Chinese President Xi Jinping later this week. Optimism about the talks has reduced demand for gold as a hedge against geopolitical risks.
Even after the correction (on Monday), the price of gold is still up more than 50% this year, supported by strong ETF demand and central bank buying amid diversification.
The recent price decline may even be seen by some central banks as a chance to increase their holdings.
Investors are now focused on the Fed's policy meeting, which begins later today and is expected to conclude on Wednesday with a 25 basis point rate cut.
Gold and silver show sharpest decline after record highs22.10.25, 09:51
While lower rates typically boost gold prices by lowering real yields, much of the decline appears to be priced in, leaving limited upside potential for the metal in the near term.
Other precious and industrial metals also traded lower on Wednesday amid broader risk sentiment.
Silver futures fell 0.6% to $46.49 an ounce, while platinum futures fell 1.6% to $1556.60 an ounce.
London Metal Exchange copper futures fell 0.6% to $10,948.95 a tonne, while US copper futures fell 0.8% to $5.12 a pound. London Metal Exchange (LME) copper futures hit a record high of $11,052 a tonne on Monday.
With growing supply disruptions and rising trade optimism, the outlook for copper is starting to look brighter.
Addition
After reaching an all-time high of over $4380, this week's decline is related to the consequences of profit-taking amid speculative aspects.