Gold (XAU/USD slipped to approximately $4,065 during the early Asian session on Monday, marking a notable pullback from its recent record-setting highs. The decline comes as traders opt to lock in profits following a prolonged rally that pushed the precious metal to historic levels.
This retreat is not solely driven by technical factors. Renewed optimism surrounding US-China trade relations has also played a significant role in dampening safe-haven demand. The upcoming meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea on Thursday is expected to be a pivotal moment in ongoing trade negotiations.
Adding to the sentiment shift, US Treasury Secretary Scott Bessent announced on Sunday that both nations have agreed on a framework for a potential trade deal. This framework is set to be discussed in detail during the leaders’ meeting later this week, fueling hopes of a breakthrough that could ease geopolitical tensions and support risk assets.
Meanwhile, the US Dollar has regained some strength, further capping gold’s upside. A stronger dollar typically weighs on gold prices by making the metal more expensive for holders of other currencies.
Key Takeaways
- Gold fell to around $4,065 in early Asian trading on Monday.
- Profit-taking follows a historic rally to all-time highs.
- Optimism around US-China trade talks reduces safe-haven demand.
- US Treasury confirms framework agreement ahead of Trump-Xi meeting.
- A stronger US dollar adds pressure to gold prices.
As markets await the outcome of the Trump-Xi summit, gold traders will be watching closely for signals that could influence risk sentiment and the trajectory of precious metals.