Gold prices tumbled below $4,000 per ounce on Monday, driven primarily by the cooling of safe-haven demand following encouraging progress in U.S.-China trade negotiations.
Spot gold fell 2.9% to $3,991.39/oz after negotiators from the U.S. and China outlined a framework to pause tariffs. Analysts, including David Meger of High Ridge Futures, noted that a potential trade deal lessens the need for safe-haven assets. This decline continues the retreat from the record high of $4,381.21/oz hit on October 20.
The market is now also focused on the Federal Reserve's interest rate decision on Wednesday, where a 97% chance of a quarter percentage point rate cut is anticipated a typically bullish factor for non-yielding gold.
Despite the recent dip, most analysts remain optimistic about gold's long-term trajectory, with some viewing $5,000/oz as a possibility. However, Capital Economics expressed skepticism about the sustainability of the recent rally, lowering their end-2026 forecast to $3,500/oz. Other precious metals also declined, with silver falling 4%.
