Gold prices slipped in Asian trade on Monday, dropping to around $3,275 and trading near five-day lows as optimism surrounding United States-China trade negotiations undermined demand for safe-haven assets.
By 3:45 pm AEST (5:45 am GMT) spot gold prices were down $54.15 or 1.6% to US$3,271.30 per ounce.
The decline followed upbeat comments from both Washington and Beijing after two days of high-level trade talks in Geneva, Switzerland.
U.S. officials described the discussions as having achieved “substantial progress”, while Chinese Vice Premier He Lifeng called the outcome “an important first step” in stabilising bilateral relations.
The apparent thaw in trade tensions between the world’s two largest economies weighed on gold, typically sought as a hedge during periods of uncertainty.
Investors now await further details of the agreement, which are expected to be released on Monday (Tuesday AEST), to assess the potential implications for global markets.
The firmer U.S. dollar also contributed to gold's decline, adding further headwinds for the non-yielding asset.
However, the metal’s downside may be limited as geopolitical trade uncertainties still linger. Although India and Pakistan announced a ceasefire over the weekend, bringing a temporary halt to escalating military activity, both nations have since claimed victory, keeping regional risk elevated.
