Gold Prices Decline Following First Weekly Loss Since Mid-August

SadaNews - Gold prices fell after recording their first weekly loss since mid-August, as demand for safe havens decreased following progress in trade talks between the United States and China.

The precious metal dropped by as much as 1.3%, approaching a level of $4,058 per ounce, after Washington and Beijing indicated they were close to finalizing a comprehensive agreement, coinciding with U.S. President Donald Trump's Asian tour that includes a series of diplomatic meetings.

This agreement could help alleviate some economic risks and geopolitical tensions that had been supporting the precious metal.

Correction After Record Surge

Gold experienced a sharp reversal last week after a surge that brought it to a record level of over $4,380 per ounce last Monday, amid signs that the metal had reached a state of overbuying.

Despite this, gold remains up about 55% since the beginning of the year, supported by purchases from central banks and the trend known as "currency devaluation trades", where investors avoid government bonds and currencies to protect themselves from increasing fiscal deficits.

Kyle Rodda, a senior market analyst at Capital.com, stated: "We are now returning to a more realistic ground and a more rational market." He added: "There was a bit of an exaggerated reaction due to trade developments that came in better than expected."

A Week Busy with Central Bank Decisions

This week is expected to see a series of monetary policy announcements, as both the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan will announce their decisions regarding interest rates.

The Federal Reserve is expected to cut interest rates by 25 basis points, while the other two banks are likely to keep their rates unchanged. Low borrowing costs are a supportive factor for gold, as it does not yield interest.

Spot gold fell by 0.8% to $4,081.02 per ounce at 9:02 AM in Singapore, after losing 3.3% last week. Silver also declined, continuing its weekly drop of 6.3%. Meanwhile, the Bloomberg Dollar Index fell by 0.1%, while platinum and palladium rose slightly.

At the same time, about a thousand traders, analysts, and professional refiners gathered in Kyoto, Japan to participate in a conference organized by the London Bullion Market Association.

The conference, which began on Sunday, recorded a record attendance, amid expectations that competition to attract talent in the gold trading sector would be one of the main topics of discussion.