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Gold Extends Decline Ahead Of U.S-China Trade Talks
Summary:
Gold prices fell 1.2% to around $4,065 an ounce on October 27 as progress in U.S.–China trade talks reduced safe-haven demand. The decline follows profit booking after a strong rally that took prices above $4,380 per ounce. While easing geopolitical tensions have softened sentiment, gold remains over 55% higher for the year, supported by central bank buying and inflation concerns.
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Gold extended its decline on October 27 after a sharp rally in precious metals started to fade, as progress in trade talks between the U.S. and China dampened demand for safe-haven assets. According to a Bloomberg report, bullion fell by as much as 1.2% to around $4,065 an ounce.
The decline follows a torrid run that began in mid-August and pushed the yellow metal briefly above $4,380 per ounce. That run reversed sharply once investors appeared to lock in profits and technical indicators flagged overbought conditions.
Invest in Indian Markets and Unlock Future Potential With 5paisa!Underlying the drop is a shift in sentiment: signs that the U.S. and China are nearing a broad trade agreement have eased geopolitical tensions that had boosted gold’s appeal. Such a deal would weaken one of the key catalysts for bullion’s safe-haven bid.
Despite the recent slip, gold remains more than 55 % higher for the year, supported by central bank purchases and concerns over currency debasement and fiscal deficits. In fact, the pull-back has drawn bargain-hunters: dealers from Singapore to the U.S. have noted increased interest from investors seeking to enter at lower levels, as per the report.
Looking ahead, participants in the bullion market are keeping an eye on central-bank decisions, especially from the Federal Reserve, the European Central Bank and the Bank of Japan. The Fed is expected to cut rates by 25 basis points, while the ECB and BoJ are likely to hold steady, decisions which will bear on gold since lower interest rates tend to be favourable for bullion.
In summary, while gold’s recent momentum has stalled amid improving global trade prospects and reducing safe-haven demand, its longer-term fundamentals — central bank buying and inflation concerns — remain intact. The current dip may offer an entry point for investors keeping a close watch on the upcoming policy decisions.
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