Gold Prices Dip as Dollar Strengthens and Trade Optimism Tempers Safe-Haven Demand

Gold prices slipped about 1% on Monday, easing from last week’s highs as a stronger U.S. dollar and improving sentiment over a potential U.S.–China trade framework reduced demand for safe-haven assets. Spot gold fell to around $4,280 per ounce, while silver also edged lower after a record-setting run earlier in the month.

The pullback came as the U.S. dollar index climbed to a near two-week high, supported by rising Treasury yields and optimism that Washington and Beijing may be nearing a partial trade understanding ahead of the APEC summit. Traders shifted capital back into equities and risk assets, betting that any thaw in trade relations could bolster global growth prospects and ease inflationary pressures.

Still, analysts caution that gold’s retreat may be temporary. Inflation remains sticky across major economies, and geopolitical tensions—including renewed energy-market disruptions and political uncertainty in the U.S.—continue to underpin long-term bullion demand. “We’re seeing profit-taking rather than a structural shift,” one commodities strategist noted, emphasizing that institutional funds remain net long on precious metals.

Meanwhile, central banks have sustained their gold-buying trend, led by China and Turkey, reflecting an ongoing effort to diversify reserves away from dollar-denominated assets. That steady demand could help cushion gold from deeper corrections, even if near-term volatility persists.

From a broader market perspective, gold’s decline mirrors a temporary rotation from defensive assets into growth-linked sectors as investors balance short-term optimism with persistent macro risks. For now, the precious metal remains a barometer of global confidence—cooling slightly but far from losing its luster amid an uncertain policy and geopolitical backdrop.