Gold Retreats from Record Highs as Trade Hopes Boost Risk Appetite
Gold prices slid on Tuesday, easing from record levels as renewed optimism over U.S.–China trade relations prompted investors to shift away from safe-haven assets.
At 09:20 ET (13:20 GMT), spot gold dropped 3.4% to $4,201.65 per ounce after touching an all-time high of $4,381.21 on Monday. U.S. gold futures for December delivery also dipped 0.5% to $4,217.25, as traders booked profits following last week’s sharp rally.
Trade Optimism Sparks Market Rotation
The decline came after U.S. President Donald Trump expressed confidence about reaching a “strong and fair” trade deal with Chinese President Xi Jinping during next week’s summit in South Korea. In addition, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in Malaysia later this week, signaling progress in easing trade tensions.
Comments from White House adviser Kevin Hassett about a potential end to the U.S. government shutdown further lifted sentiment, reducing demand for defensive assets like gold.
Analysts Caution on Overheated Market
John Higgins, Chief Markets Economist at Capital Economics, cautioned that gold’s price surge may be overextended, noting it now trades about 60% above its inflation-adjusted 1980 peak and nearly triple its long-term average. Higgins warned of a possible correction if investor sentiment continues improving.
Metals Weaken as Dollar Strengthens
Other precious metals mirrored gold’s retreat. Silver dropped 4.8% to $48.95 per ounce, platinum fell 5.3% to $1,565.10, and copper on the LME slipped 0.6% to $10,624 per ton. A stronger U.S. dollar added pressure, making metals more expensive for global buyers.
The broad pullback underscores a shift in market sentiment as geopolitical and trade risks appear to subside.