Gold prices slipped more than 1% on Monday as growing optimism over U.S.-China trade relations encouraged risk-taking among investors, reducing the appeal of traditional safe-haven assets like gold. A stronger dollar further weighed on bullion.
As of 0220 GMT, spot gold dropped 1.4% to $3,272.89 an ounce, retreating from its record peak of $3,500.05 reached on April 22. Meanwhile, U.S. gold futures were down 0.4%, trading at $3,283.70.
The U.S. dollar index (.DXY) rose by 0.3%, making gold more expensive for international buyers and adding additional pressure to bullion prices.
“Financial markets, especially risk assets, appear to be feeling more reassured about the tariff situation compared to the heightened anxiety earlier in April,” noted Tim Waterer, chief market analyst at KCM Trade. He added that recent comments from the White House have increased optimism about a potential trade agreement between Washington and Beijing, reducing the need for safe-haven assets like gold.
Supporting this sentiment, U.S. President Donald Trump confirmed that negotiations on tariffs were ongoing with China. Last week, the Trump administration signaled a willingness to ease trade tensions, offering hope for a resolution to the long-standing dispute between the world’s two largest economies, which had previously raised fears of a global economic slowdown.
