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Gold traded steadily above USD 4,250 on Monday, consolidating after Friday’s pullback, as investors looked ahead to key US inflation data and a new round of trade negotiations between Washington and Beijing. Despite the recent correction, expectations of further Federal Reserve rate cuts continue to anchor support, with markets pricing in a 25-basis-point cut in October and another in December.
Friday’s decline followed remarks by President Donald Trump, who dialled back his threat to impose 100% tariffs on Chinese goods, calling such measures unsustainable and signalling optimism ahead of talks with President Xi Jinping. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are expected to meet this week, with investors hoping for progress after months of tension. The prolonged US government shutdown, now extending into another week, remains an additional source of uncertainty.
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Geopolitical risks also remained in focus. In the Middle East, tensions remain elevated despite the ceasefire. Meanwhile, in Eastern Europe, military activity continued despite calls to freeze the conflict.
Looking ahead, traders will closely monitor the US CPI release on Friday and developments in US-China negotiations. A setback in negotiations could increase global risk aversion and revive gold’s bullish momentum, said Wael Makarem Financial Markets Strategists Lead at Exness.
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