In a significant market shift, gold prices have taken a sharp dive. This decline comes as the precious metal’s status as a safe – haven asset has been undermined by positive signs emerging from trade talks between the United States and China, as well as a reduction in geopolitical tensions.
During early trading in Asia, bullion saw a drop of as much as 2.3%. This follows a weekly increase of 2.6%, when investors were closely eyeing the outcome of the upcoming trade negotiations between the world’s two largest economies. After two days of talks in Switzerland, both the US and China reported making “substantial progress” in their efforts to de – escalate the ongoing trade war. However, at this point, neither side has announced any specific measures.
Investors are also keeping a close watch on another crucial development. Donald Trump’s attempts to secure peace in Ukraine have reached a critical juncture, with Volodymyr Zelenskiy challenging Vladimir Putin to engage in talks this week.
The trade war initiated by the new US administration has been a major driver behind gold’s remarkable 25% rally this year. This rally propelled bullion to a record high of approximately $3,500 an ounce last month. Although a more conciliatory US stance on trade could reduce the demand for gold as a haven, the precious metal has still found support from strong purchases by central banks and active speculative trading among Chinese retail investors.
As of 6:57 AM in Singapore, spot gold was down 2%, trading at $3,277.2 an ounce. While silver also experienced a slight decline, platinum and palladium saw gains.
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