New York/London – Gold prices continued their downward slide on Monday, extending losses from the previous week as advancing US-China trade negotiations reduced demand for the precious metal as a safe-haven asset. After registering its first weekly decline since mid-August, spot gold fell as much as 1.3% to around $4,058 per ounce in early Asian trading, reflecting a broader easing of geopolitical tensions that had previously driven bullion's rally.BULLMER Trendy Clothing Set with Shirt & Pants Co-ords for Men

Key Drivers Behind the Drop- US-China Trade Optimism: The US and China signaled they are close to finalizing a comprehensive trade agreement during President Donald Trump's ongoing diplomatic tour in Asia. Officials indicated that a framework could be sealed at an upcoming meeting between Trump and Chinese President Xi Jinping in South Korea later this week, potentially averting threatened 100% tariffs on Chinese imports set for November 1. This de-escalation has shifted investor sentiment toward riskier assets like equities, eroding gold's traditional role as a hedge against uncertainty. As US Treasury official Scott Bessent noted, "The threat of the 100% tariff has gone away," further diminishing escalation risks.Also Read; BSF Deploys Rampur & Mudhol Hounds in K9 Units to Boost “Aatmanirbhar Bharat” in Security Forces

Why Gold Is Losing Its Shine

Broader Market Sentiment: A strengthening US dollar and rising Treasury yields—amid expectations of a Federal Reserve rate cut this week—have compounded the pressure on gold, which typically underperforms in higher-yield environments. The dollar index climbed 0.2% to near 100.70, while 10-year US Treasury yields hovered around 4.38%. Analysts from Capital.com highlighted that "positive developments in US trade policy are diminishing the appeal of gold in the short term."

Year-to-Date Context: Despite the recent pullback, gold remains up over 55% year-to-date, buoyed by central bank purchases and concerns over fiscal deficits. The sharp 5% single-day drop last week marked the steepest decline since August 2020, but festive demand in markets like India and bargain-hunting by retail investors have provided some support. Dealers in Singapore and the US reported increased buying interest during the dip.

Market experts suggest that the current drop is largely a technical correction within a broader uptrend supported by long-term factors like central bank buying and global fiscal debt. However, investors should be prepared for continued short-term volatility in the bullion market until more clarity emerges from the Trump-Xi meeting and the Fed announcement.