Gold Prices Decline as Geopolitical Fears Ease

SadaNews - Gold prices fell on Monday, as demand for the metal as a safe haven decreased due to signs of easing geopolitical risks, while investors await the upcoming U.S. inflation data, which may provide signals regarding the path of interest rates at the Federal Reserve.

Spot gold dropped by 0.7% to $3,376.67 per ounce (as of 02:48 GMT), after hitting its highest levels since July 23 on Friday.

U.S. gold futures for December delivery fell by 1.5% to $3,439.70.

Matt Simpson, senior analyst at "City Index," stated: "The easing of geopolitical tensions related to the war in Ukraine has driven gold prices down, following Friday's announcement of an anticipated meeting between President Donald Trump and Russian President Vladimir Putin on U.S. soil."

Trump announced on Friday that he would meet with Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.

Investors are focusing this week on the U.S. consumer price index data, due out on Tuesday, as analysts expect that tariff effects will raise the core index by 0.3% month-on-month, resulting in an annual rate of 3.0%, moving away from the Federal Reserve's 2% target.

Simpson added: "A strong reading could bolster the U.S. dollar and limit gold gains, although I believe that support levels will remain in place as investors seek to seize opportunities at lower prices."

The weaker-than-expected U.S. jobs report recently increased bets on a rate cut in September, with markets showing approximately a 90% chance of a rate cut that month, with another reduction expected before the end of the year.

Markets are also awaiting trade talks as the August 12 deadline set by Trump for reaching an agreement between Washington and Beijing approaches.

In the week ending August 5, speculators in COMEX gold raised their net long positions by 18,965 contracts to reach 161,811 contracts.

For other precious metals, spot silver fell by 0.8% to $38.02 per ounce, platinum decreased by 0.9% to $1,320.45, while palladium lost 0.3% to reach $1,122.69.