Emre Yumlu 
Gold prices began the week on a downward trajectory as a stronger U.S. dollar and easing concerns over U.S.-China trade tensions weakened demand for safe-haven assets. The improving risk appetite in global markets placed additional pressure on the precious metal.
Stronger Dollar Weighs on Gold
At the start of the week, spot gold declined by 1% to $4,072.65 per ounce, while U.S. December futures fell 1.3% to $4,085.60 per ounce.
The U.S. dollar strengthened to its highest level in two weeks against the Japanese yen, making gold more expensive for investors holding other currencies. The rise in the greenback also encouraged investors to shift toward riskier assets, reducing demand for gold as a traditional safe haven.
U.S.-China Talks Boost Market Sentiment
Reports over the weekend indicated that top economic officials from the United States and China had reached a preliminary framework for a new trade agreement, expected to be approved by Presidents Donald Trump and Xi Jinping.
According to analyst Kyle Rodda, this development was “a positive surprise for the markets,” creating short-term headwinds for gold. Rodda added that easing trade tensions improved overall market sentiment, limiting the supportive environment that typically benefits gold prices.
Markets Await Fed’s Policy Decision
Investors are now turning their attention to the Federal Reserve’s policy meeting scheduled for Wednesday, where the central bank is expected to announce its latest interest rate decision.
Recent U.S. inflation data came in below expectations, strengthening the likelihood of a 25 basis point rate cut. Although lower interest rates generally favor gold, many analysts believe this expectation has already been largely priced into the market.
ETF Holdings Decline, Other Metals Follow the Trend
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell from 1,052.37 tons to 1,046.93 tons, representing a 0.52% decrease.
The weakness in gold extended to other precious metals as well:
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Silver: down 1.3% to $48.04 per ounce
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Platinum: down 0.1% to $1,604.80 per ounce
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Palladium: down 0.8% to $1,418 per ounce
Short-Term Pressure, Long-Term Potential
Analysts note that the strength of the dollar and improved market sentiment may continue to weigh on gold in the near term. However, the Federal Reserve’s dovish stance and ongoing global economic uncertainties are expected to provide long-term support for the precious metal.
*This content is not investment advice.
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