Gold prices extend drop as progress on US-China trade deal erodes safe-haven demand
Spot gold prices declined as much as 1.3% to $4,058 an ounce, after losing 3.3% last week. Silver prices also declined, extending last week’s drop of 6.3%.
Gold prices fell, after posting its first weekly drop since mid-August, as the progress on a US-China trade deal sapped safe-haven demand.
Spot gold prices declined as much as 1.3% to near $4,058 an ounce, after losing 3.3% last week. Silver also declined, extending last week’s drop of 6.3%. The Bloomberg Dollar Index slipped 0.1%, while platinum and palladium edged higher.
Earlier, the United States and China signalled they were nearing completion of a sweeping trade deal as US President Donald Trump visits Asia for a series of diplomatic engagements. An agreement may ease some of the economic risk and geopolitical tensions that have bolstered the precious metal.
A blistering rally that propelled gold to a record high just above $4,380 an ounce last Monday has since gone into reverse on signs the metal had become overbought. Bullion is still up about 55% this year though, with central-bank buying and the so-called debasement trade—investors avoid sovereign debt and currencies to protect themselves from runaway budget deficits—providing support.
“We’re returning now to a much more fundamental footing and a much more sensible market,” said Kyle Rodda, a senior financial market analyst at Capital.com. “There was a bit of a knee-jerk response because of this US-China trade development, which was much better than anyone was anticipating.”
Meanwhile, nearly 1,000 professional gold traders, brokers and refiners have descended on Kyoto in Japan for a conference run by the London Bullion Market Association. Attendance at the gathering, which began on Sunday, is at a record high, with a growing talent war for bullion traders likely to be a hot topic of conversation.
