Oct 27— Gold prices fell on Monday, weighed down by a stronger U.S. dollar and signs of easing U.S.–China trade tensions. Investors are now turning their attention to a series of major central bank meetings later this week for monetary policy guidance.
As of 05:04 GMT, spot gold slipped 1% to $4,072.65 per ounce, while U.S. gold futures for December delivery fell 1.3% to $4,085.60 per ounce.
A firmer U.S. dollar has made gold more expensive for holders of other currencies. The Dollar Index, which measures the greenback against a basket of major currencies, rose about 0.4% during the session, extending its recent gains as markets price in a cautious “hawkish” stance from the U.S. Federal Reserve (Fed).
“When the dollar gains momentum, gold tends to lose some of its shine, especially as investors shift their focus toward monetary policy cues,” said Michael Langford, Director at AirGuide.
Another key factor weighing on gold is improving sentiment around U.S.–China trade talks. Media reports suggest the two countries are moving closer to a partial trade deal, which could pave the way for the removal of some tariffs imposed in previous years.
This is being interpreted positively by global markets. As trade tensions ease, investors’ demand for safe-haven assets like gold declines, pushing prices lower.
“Any progress in U.S.–China negotiations can pressure gold prices, as investors shift toward riskier assets like equities,” said independent commodity analyst Edward Moya.
Beyond trade developments, the market’s main focus this week is on a series of key central bank meetings — including the U.S. Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of Japan (BoJ).
The Fed is widely expected to keep interest rates unchanged but may offer clearer signals about its path for rate cuts in 2026. Meanwhile, the ECB faces sluggish inflation and weak growth prospects in the Eurozone, making its policy stance closely watched.
Central bank signals will directly affect the opportunity cost of holding gold, which offers no yield. When interest rates rise or expectations of rate hikes increase, gold typically comes under pressure.
“We see short-term downward pressure on gold, particularly if central banks remain firm on their hawkish stance,” ANZ Bank wrote in its Oct. 27 market strategy note.
Alongside gold, spot silver dropped 0.8% to $23.14 per ounce, platinum fell 0.6% to $899.27 per ounce, and palladium slipped 0.9% to $1,113.85 per ounce.
Analysts say these metals may see heightened volatility in the coming days as the market digests policy signals from the Fed and ECB. A more dovish tone from the Fed could weaken the dollar and potentially lift gold prices again.
In the near term, gold prices are expected to trade within a narrow range as markets await clearer monetary policy signals. However, if the dollar continues to strengthen and trade talks make further progress, gold may face additional downward pressure.
Still, geopolitical risks — particularly in the Middle East and tensions in the South China Sea — remain potential catalysts for a gold rebound, as investors often flock to the metal during periods of heightened uncertainty.
“Investors shouldn’t abandon gold based on short-term moves alone. In an unpredictable global environment, gold remains an effective hedge,” said Margaret Yang, market strategist at DailyFX.
Gold prices fell 1% to $4,072.65 per ounce as a stronger dollar and easing U.S.–China trade tensions weighed on demand.
A firmer dollar made gold more expensive for foreign buyers, reducing its safe-haven appeal.
Investors are focusing on Fed, ECB, and BoJ meetings for policy direction.
The short-term outlook depends on the dollar, trade developments, and geopolitical risks.
1. Why does gold fall when the U.S. dollar strengthens?
A stronger dollar makes gold more expensive for investors using other currencies, which reduces demand and pushes prices lower.
2. How do U.S.–China trade talks impact gold prices?
Easing trade tensions reduce market uncertainty and safe-haven demand, leading to downward pressure on gold prices.
3. What role do central banks play in gold price movements?
Monetary policy decisions, especially interest rates, affect the opportunity cost of holding gold. Higher interest rates often push gold prices lower.
4. What is the short-term outlook for gold?
Gold may stay in a tight range while awaiting central bank decisions. However, geopolitical risks can still trigger price rebounds.
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