Each ounce of gold fell up to 130 USD in the first session of the week, while all three indexes of US stocks reached new record highs.
At the end of the trading session on October 27, the world spot gold price fell by 130 USD to 3,980 USD per ounce. This is the lowest level since the session on October 10. At the opening session on the morning of October 28, the price has now increased to 3,998 USD.
The market fell due to signs of easing US-China trade tensions, which reduced demand for safe havens. Investors are also awaiting the US Federal Reserve’s interest rate decision at this week’s meeting.
“The possibility of a US-China trade deal has reduced demand for safe-haven gold,” said David Meger, director of metals trading at High Ridge Futures.
World gold prices fell sharply in the session of October 27. Chart: Kitco
Prices hit a record high of $4,381 in the October 20 session, then fell more than 3% last week, due to signs of easing tensions between the world’s two largest economies. On October 26, the two countries’ negotiating teams reached a framework agreement. US President Donald Trump and Chinese President Xi Jinping are expected to meet on October 30 to continue negotiations on a trade deal.
The market is now pricing in a 97% chance of a Fed rate cut at this week’s meeting. Gold tends to rise in a low-interest-rate environment.
While most investors expect prices to continue rising, reaching $5,000 an ounce, some are skeptical. Analysts at Capital Economics have cut their forecast for gold prices by the end of 2026 to $3,500 an ounce. “The 25% price increase since August is unlikely to be as sustainable as previous rallies,” they explain.
Meanwhile, all three indexes of the US stock market set new records. At the end of the first session of the week, the S&P 500 index increased 1.2% to 6,875 points, surpassing the 6,800 mark for the first time. The Nasdaq Composite increased 2.8% to 23,637 points, thanks to semiconductor stocks. The DJIA closed at 47,544 points, equivalent to an increase of 0.7%.
Chipmakers were the biggest beneficiaries of the easing of tensions between the US and China. Nvidia and Broadcom shares rose more than 2%, while Qualcomm jumped more than 11% to its highest level to date. Tesla shares also added 4.3%.
Investors will receive third-quarter earnings reports from major tech companies this week, including Alphabet, Amazon, Apple, Meta Platforms and Microsoft. The outcome of the Fed’s policy meeting will also be in focus, especially after the U.S. Bureau of Labor Statistics released lower-than-expected inflation figures last week.
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