Gold prices bounce after cooling U.S.-China trade jitters saw selling

Investing.com-- Gold prices rose Monday, recouping a measure of recent losses and keeping recent record highs close as markets digested some conciliatory comments from U.S. officials regarding the trade conflict with China. 

At 08:20 ET (12:20 GMT), Spot gold rose 0.7% to $4,280.95 an ounce and gold futures for December rose 2% to $4,297.24/oz.

Spot gold hit a peak of $4,379.44/oz last week. 

Gold slides on easing U.S.-China trade jitters 

The yellow metal, often used as a safe haven, tumbled from record highs last week after U.S. President Donald Trump raised doubts about the likelihood of a prolonged trade war with China, stating that upcoming talks with Beijing remained on track. 

Trump said he viewed high tariffs on China as “not sustainable,” and that he was set to meet Chinese President Xi Jinping in South Korea in two weeks. 

Separately, U.S. Treasury Secretary Scott Bessent said that talks with Chinese officials were scheduled this week. 

Trump’s comments sparked a rally in broader financial markets, dampening some haven demand for gold and driving flows into more risk-heavy assets. 

Gold was also subject to profit-taking after a stellar rally in the past two months. Growing concerns over the U.S. economy, amid an ongoing government shutdown, as well as bets on more rate cuts by the Federal Reserve, largely underpinned bullion prices.

Geopolitical tensions keep safe haven demand in place 

Gold’s gains at the start of the new week also came amid some signs of strain in the Israel-Hamas ceasefire, following attacks over the weekend. 

But Israel signaled that the ceasefire remained in place, and that aid for Gaza will resume from Monday.

On the geopolitical front, focus was also on Washington’s attempts to broker a Russia-Ukraine ceasefire, with Trump seen meeting Ukrainian President Volodymyr Zelensky over the weekend. 

Reports said Trump urged Zelensky to cede territory to Moscow, and also declined more military aid for Kyiv. 

Geopolitical uncertainty, coupled with growing concerns over the U.S. economy, especially amid a government shutdown, kept haven demand for gold and its peers underpinned. 

Strategists at RBC Capital Markets say gold’s rally is not just a result of favorable macro conditions, but is being fueled primarily by a “compounding uncertainty” that continues to build. They argue this persistent unease has strengthened gold’s appeal as a hedge, safe haven, and portfolio diversifier.

Political tension over a potential U.S. government shutdown, renewed U.S.-China trade friction, concerns about Federal Reserve independence, fiscal strain, inflation anxiety and fears around debasement have all “together contributed to an otherwise consistent sense of uncertainty” that investors are responding to by increasing allocations to gold," RBC strategists led by Christopher Louney said in a note.

Elsewhere, Spot silver rose 1.5% to $50.830/oz, remaining close to record highs, while spot platinum gained 0.3% to $1,624.45/oz. 

Among industrial metals, copper rallied following some positive economic readings from top importer China. China’s gross domestic product grew slightly more than expected in the third quarter, but at its slowest pace in a year. 

Ambar Warrick contributed to this article