Gold prices modest pullback comes asĀ optimism builds around renewed US-China trade talks, with risk appetite improving across markets after weeks of tension-driven volatility.
High Level US-China Talks Offer Tentative Relief
Market attention is centred on fresh diplomatic engagement between Washington and Beijing.Ā US Treasury Secretary Scott BessentĀ confirmed plans to meetĀ Chinese Vice Premier He LifengĀ in Malaysia this week in an effort to defuse the latest escalation in the long running trade dispute. The development has tempered haven demand, fuelling aĀ rebound in the US dollarĀ and placing short term pressure on gold.
Shutdown Resolution Hopes Lift Risk Appetite
Adding to the improved sentiment,Ā White House Economic Adviser Kevin HassettĀ said theĀ US government shutdown could be resolved within days, providing a further boost to risk sensitive assets. The prospect of a reopening bolstered equities and weighed on the safe haven trade, but analysts caution thatĀ gold remains underpinned by broader macro uncertainty, particularly ahead of upcoming inflation data and earnings from major US corporations.
Fed Rate Cut Bets Keep Goldās Appeal Intact
Despite the pullback, gold continues to attractĀ bargain hunters, supported by expectations that theĀ Federal Reserve will cut rates twice moreĀ before year end. Dovish Fed pricing has anchored the metalās long term bullish narrative, with investors continuing to view gold as aĀ ābuy on dipā opportunityĀ amid persistent geopolitical and fiscal risks.
Trump Tariff Threat Adds a New Layer of Uncertainty
In a move that reignited trade tensions,Ā President Donald TrumpĀ warned late Monday that the US could imposeĀ 155% tariffs on Chinese imports starting November 1Ā if no agreement is reached. While traders largely see the threat as a negotiating tactic, the headline risk underscores the fragile state of global trade relations Ā and may swiftly restore goldās safe haven bid should talks falter.
Market Outlook: All Eyes on US CPI and Trade Headlines
For now, goldās trajectory remains tethered to theĀ ebb and flow of US-China developmentsĀ andĀ investor positioning ahead of Fridayās US Consumer Price Index report. With volatility elevated and policy expectations in flux, traders are advised to stay alert. Any sign of a breakdown in talks or a hotter than expected inflation print could reigniteĀ a renewed rush into safe haven assets, setting the stage for goldās next major move.
Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.