Gold Drops from Record Highs as Trade Optimism Grows
Gold Falls from Record Highs as Trade Optimism Lifts Risk Sentiment
Gold prices retreated on Tuesday, pulling back from record highs as investors took profits and easing U.S.–China trade tensions reduced demand for the safe-haven metal.
At 09:20 ET (13:20 GMT), spot gold fell 3.4% to $4,201.65 per ounce, retreating from Monday’s all-time high of $4,381.21. U.S. gold futures for December delivery slipped 0.5% to $4,217.25, as investors reassessed safe-haven positions following a week-long rally.
Easing U.S.–China Tensions Trigger Profit-Taking
The pullback followed remarks from U.S. President Donald Trump, who signaled optimism over trade talks with China, saying he expected a “strong and fair” agreement after meeting with President Xi Jinping at a summit in South Korea next week.
Meanwhile, U.S. Treasury Secretary Scott Bessent is scheduled to meet Chinese Vice Premier He Lifeng in Malaysia later this week, amid efforts to stabilize strained relations. Trump has previously threatened to impose 100% tariffs on Chinese goods starting November 1.
Further easing market anxiety, White House economic adviser Kevin Hassett said on Monday that the ongoing U.S. government shutdown could end soon, with negotiators nearing a bipartisan deal.
The combination of trade optimism and political stability weakened demand for traditional safe-haven assets like gold, triggering a round of profit-taking among traders.
Analyst Warns of Overheated Gold Market
According to John Higgins, Chief Markets Economist at Capital Economics, gold’s rapid rally may not be sustainable. Higgins warned that the metal’s price has climbed “far beyond its fair value,” now sitting nearly 60% above its 1980 inflation-adjusted peak and three times its long-term average.
He added that the current price surge has outpaced both inflation and real-asset performance, suggesting a potential correction if market sentiment continues to improve.
Other Metals Weaken as Dollar Strengthens
Broader metals markets also softened, weighed down by a stronger U.S. dollar, which makes commodities more expensive for overseas buyers.
- Silver futures fell 4.8% to $48.95 per ounce
- Platinum futures slid 5.3% to $1,565.10 per ounce
- Copper futures on the LME dropped 0.6% to $10,624 per ton
- U.S. copper futures declined 1.1% to $4.9803 per pound
The pullback across the metals complex highlights shifting investor sentiment toward risk assets as geopolitical and trade risks ease.
