Gold Prices Slip Below $4,000/Oz as US China Trade Optimism Weighs on Demand

The price of gold slipped below $4,000 per ounce in both spot and futures markets on October 28, 2025, as traders booked profits amid encouraging signs from US China trade talks. 

This marks the first time since October 9, 2025, that gold dipped below this level, with spot prices touching $3,989 and December futures hitting $3,986.

Gold Retreats from Record Highs Amid Trade Optimism

Gold has fallen nearly 9% from its recent peak of $4,381.6 on October 20, 2025. The fall coincides with renewed optimism for a resolution to ongoing US China trade tensions. US President Donald Trump is preparing for a crucial meeting with Chinese President Xi Jinping on Thursday, which has spurred investor appetite for riskier assets and softened demand for safe haven instruments like gold.

Wall Street Rally Triggers Precious Metals Weakness

Equity indices in the US struck record highs on Monday, reflecting market enthusiasm about progress in global trade negotiations. Amid this risk-on sentiment, gold witnessed a second consecutive week of declines after 9 weeks of uninterrupted gains, driven largely by profit-taking and lower investor demand.

Year-to-Date Gains Remain Strong

Despite recent corrections, gold prices remain up more than 50% in 2025, powered by strong central bank purchases and robust ETF inflows earlier in the year. However, as price momentum stalls and leveraged traders unwind positions, the market has entered a period of correction.

Read More, Global Central Banks Reduce US T-Bill Holdings, Shift to Gold Reserves!

Focus Turns to the US Federal Reserve's Policy Decision

Markets are closely watching the US Federal Reserve meeting that began on October 28, 2025, with a rate decision expected on Wednesday night Indian time. Expectations of a 25-basis-point rate cut remain, but the commentary from Fed Chair Jerome Powell may influence further market direction. Any hawkish outlook could apply further pressure on bullion prices.

Gold Stabilises Near $4,000 as Buyers Emerge

After the initial decline, spot gold prices recovered slightly and stabilised around the $4,000 mark. Early signs of buying at lower levels have given the market some support ahead of key macroeconomic updates expected through the week.

Conclusion

Gold prices have dipped below $4,000/oz for the first time since October 9, 2025, as investor sentiment shifts toward equity markets amid improving US-China trade prospects. Despite the short-term pullback, gold retains significant gains for the year, with attention now turning to the Fed’s upcoming rate policy announcement for potential cues on trend direction.

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