Gold prices recorded a significant decline during Tuesday’s trading, hitting their lowest level in more than three weeks amid weakening demand for safe-haven assets, as investor sentiment improved and trade tensions between the United States and China eased.
During early European trading hours, the yellow metal slipped below the $3,950 per ounce level, extending its losses for the third consecutive day as investors shifted toward riskier assets such as stocks and growth-linked currencies.
Declining Safe-Haven Demand
This drop is mainly attributed to easing geopolitical and trade concerns that have long supported gold as a safe-haven asset. Recent reports indicated progress in trade talks between Washington and Beijing, boosting optimism about potential agreements that could ease tensions between the world’s two largest economies.
Additionally, positive economic data from both the United States and China strengthened investors’ risk appetite, prompting capital flows away from gold and into financial markets.
Additional Pressure from the Dollar and Yields
Meanwhile, the U.S. dollar edged higher, supported by expectations that the Federal Reserve will keep interest rates unchanged in the near term, further weighing on dollar-denominated gold. U.S. Treasury yields also rose, making non-yielding assets such as gold less attractive to investors.
Market Outlook
Analysts believe the continuation of this trend will depend on the trajectory of U.S.-China trade relations and upcoming U.S. economic data. If global risk appetite continues to improve, gold could retreat further toward the $3,900 per ounce level in the short term.
However, experts do not rule out a renewed demand for the precious metal should tensions resurface or weak economic data reignite fears of a global slowdown.
Conclusion
Gold remains under clear pressure due to improving global sentiment and rising yields, yet its status as a safe-haven asset endures—meaning any sudden market turbulence could quickly reignite investor interest in the metal.
