Gold Prices Declined Due to Trade Agreement

Gold Decline: Decrease in Safe-Haven Demand

Gold is experiencing its first weekly loss since mid-August as demand for safe havens diminishes following progress in the trade agreement between the U.S. and China. The price of gold per ounce fell by 1.3% to approximately $4,058.

Trump's Visit and the Impact of the Potential Agreement

During U.S. President Donald Trump's visit to Asia, his diplomatic contacts indicated that the two countries are approaching a comprehensive trade agreement. Such an agreement could help alleviate economic risks and geopolitical tensions that have been increasing the demand for the precious metal gold.

Return from Record Levels and Market Analysis

Last week, gold prices surpassed the record level of $4,380 per ounce, but after signaling it was overbought, it retreated again. Nevertheless, gold has gained approximately 55% in value this year.

Expectations from Central Banks

Capital.com senior financial market analyst Kyle Rodda stated, "We are now returning to a more rational market condition. This U.S.-China trade development has supported a much more positive reaction than expected."

This week, statements from major central banks such as the Fed, European Central Bank, and Bank of Japan are anticipated. The Fed is expected to make a 25 basis point interest rate cut, while the ECB and BOJ are expected to keep rates unchanged. Lower borrowing costs generally create a positive effect for gold, which does not yield interest.

Current Market Status

As of 09:02 Singapore time, spot gold was trading at $4,081.02, down 0.8%, and it lost a total of 3.3% last week. Silver continued its decline of 6.3% from the previous week. Meanwhile, the Bloomberg Dollar Index fell by 0.1%, while platinum and palladium showed slight increases.