Investors are turning their attention to the Federal Reserve’s upcoming rate decision as markets rally, and gold prices fell to a near three-week low on Tuesday amid optimism over U.S.–China trade talks.
Spot gold slipped to around $3,930 per ounce, after having touched its weakest level since early October. U.S. gold futures were down about 1.8 % to around $3,946 per ounce.
“Trade tensions have really diminished, with a possible deal later this week after the Xi–Trump meeting,” said Jim Wyckoff, senior analyst at Kitco Metals. “That’s bearish for safe-haven metals.”
Market Optimism: Stock Rally vs. Federal Reserve Rate Cut Expectations
Hopes for an easing in trade frictions lifted investor confidence, with U.S. stock index futures hovering near record highs. Chinese and American officials have reportedly finalized the framework for a potential deal, which will be reviewed by Presidents Xi Jinping and Donald Trump later this week.
The upbeat sentiment has shifted focus to the Federal Reserve’s policy meeting, where the central bank is widely expected to cut interest rates by 0.25 percentage points.
Gold Price Forecast: LBMA vs. Bank of America Projections ($4,980 vs $3,800)
Despite gold’s 51 percent gain this year, fueled by global uncertainty, trade tensions, and expectations of lower interest rates, analysts remain divided about its trajectory.
The London Bullion Market Association (LBMA) forecast an average price of $4,980 per ounce over the next 12 months, while Citi and Capital Economics lowered their short-term projections earlier this week.
“The market has become overbought, which finally gave rise to this week’s correction,” Bank of America said in a note, predicting a possible retreat to $3,800 per ounce in the fourth quarter.
Broader Metals Market Declines: Silver, Platinum, and Palladium Prices Today
Other precious metals mirrored gold’s slide. Silver fell 0.5 percent to $46.68 per ounce, platinum dropped 1.1 percent to $1,575.43, and palladium lost 3 percent to $1,366.75.
While optimism over trade negotiations has buoyed global markets, gold’s latest decline underscores its sensitivity to shifting investor sentiment, particularly as geopolitical tensions ease and attention turns to monetary policy.
