Gold falls at settlement amid improving trade outlook

Gold bars

Gold prices declined at Tuesday’s settlement as cautious optimism grew over US-China trade talks and investors awaited the Federal Reserve’s interest rate decision.

December gold futures fell 0.91%, or $36.6, to $3,983.1 an ounce, closing below $4,000 for the first time since October 9.

This came amid hopes that US President Donald Trump and Chinese President Xi Jinping could reach a trade agreement during a bilateral summit scheduled for Thursday.

Senior negotiators from both countries reportedly reached a framework agreement over the weekend, which will be presented to the two leaders during their upcoming meeting.

Although the narrowing of the trade risk premium weighed on gold, expectations of a Federal Reserve rate cut in its meeting ending Wednesday limited the metal’s decline.

Separately, Bank of America analysts noted in a report that the gold market has entered an overbought phase, paving the way for a correction this week.