U.S. gold prices lower by 1% due to improved U.S.-China trade relations stimulating risky investment sentiment.
Gold Prices Dive on Monday
Gold's lustrous shine dimmed significantly on Monday, April 28, 2025, as investors' optimism toward the US-China trade scene and a surging greenback sent the precious metal tumbling over 1%. This downward spiral saw gold plummet as low as $3,272.89 per ounce at 0220 GMT - a stark contrast from its record-breaking high of $3,500.05 attained on April 22.
In the realm of US gold futures, the market mirrored this bearish sentiment, with prices slipping a modest 0.4% to $3,283.70 per ounce.
The US dollar, a perpetual gold nemesis, reared its head once again as it gained 0.3% against a variety of currencies. This dollar dominance amplified gold's cost for precious overseas holders, further compounding its downward trajectory.
Senior market analyst Tim Waterer, of KCM Trade, sheds some light on the situation, expressing that the financial markets, particularly risk-oriented assets, have developed a more upbeat perspective regarding the tariff situation compared to the outlook in early April. Waterer further observes that statements emanating from the White House about the possibility of a US-China trade deal have reduced appetite for defensive assets such as gold.
The gold market, it seems, has been swept up in a tidal wave of profit-taking and technologically-driven corrections. As gold prices ascended to new heights, this recent upward trend provoked investors to shed their gold holdings, contributing to a technical market correction that's typical in times when prices skyrocket suddenly[1][3].
With keen eyed investors awaiting forthcoming crucial US economic data disclosures, the gold market remains in a state of flux. The immediate downturn on Monday, however, appears to be a transient affair driven by the evolving short-term market dynamics[1][3].
- Investor optimism towards the US-China trade situation and a strengthening US dollar, particularly on Monday, April 28, 2025, led to a decrease in gold prices, which fell over 1%.
- The cost of gold for overseas holders became more expensive due to the USD's increase against various currencies, amplifying gold's downward trajectory.
- Statements from the White House about the potential US-China trade deal have contributed to a more optimistic outlook in the financial markets, reducing appetite for defensive assets like gold.
- Senior market analyst Tim Waterer suggests that the gold market's recent downturn may be due to a combination of profit-taking and technologically-driven corrections, often observed when prices increase significantly.
