Gold prices (XAU/USD) edged lower to around $3,275 in early Asian trading on Monday, pressured by a stronger US Dollar and easing trade tensions between the United States and China. The decline in the safe-haven asset comes after signs of progress in high-level trade discussions between the two economic giants.
Over the weekend, US and Chinese officials met in Geneva, Switzerland, and reported “substantial progress” after two days of negotiations aimed at de-escalating ongoing trade tensions. Chinese Vice Premier He Lifeng characterized the talks as “an important first step” in stabilizing bilateral trade relations, while US Treasury Secretary Scott Bessent echoed the sentiment, also describing the outcome as “substantial progress.”
Markets are now awaiting further details from the United States, expected Monday, that could clarify the scope and implications of the trade developments. Analysts suggest that any concrete policy shifts emerging from the talks could weaken gold’s appeal as a traditional safe-haven asset.
“Obviously, the overall continued uncertainty in regards to tariffs remains probably the most significant underpinning behind gold,” said David Meger, director of metals trading at High Ridge Futures. While progress in trade talks could diminish gold’s demand, lingering uncertainty may help cushion the downside.
Meanwhile, geopolitical tensions remain in focus despite a weekend ceasefire between India and Pakistan that defused fears of open conflict. Both nations have claimed victory following the agreement, which eased concerns of escalation between the two nuclear-armed neighbors. Nonetheless, persistent geopolitical risks may still lend some support to gold prices in the near term.
