Gold prices fell below $4,000 per ounce on Monday as signs of a thaw in U.S.-China trade tensions reduced some of the bullion's safe-haven appeal, while market participants awaited the U.S. Federal Reserve's interest rate decision this week.

Spot gold was down 2.7% at $4,002.29 per ounce at 1:45 p.m. ET (1745 GMT). Prices fell to $3,970.81 per ounce earlier in the session, their lowest since October 10.

U.S. gold futures for December delivery fell 2.9% to settle at $4,019.70.

"A potential U.S.-China trade deal portends a little less need for safe-haven assets such as gold," said David Meger, director of metals trading at High Ridge Futures.

Gold climbed to a record high of $4,381.21/oz on October 20, but retreated 3.2% last week following hints of easing trade tensions between the world's two largest economies. Negotiators from the U.S. and China on Sunday outlined the framework for a deal to pause steeper American tariffs and defer China's rare-earth export controls.

U.S. President Donald Trump and China's Xi Jinping are expected to meet on Thursday to further discuss a trade accord.

In addition to technical selling, gold is "seeing a further decline because of an unwinding of trade tensions that had taken prices from $3,800 to $4,400 over the course of the first three weeks of October," said CPM Group managing partner Jeffrey Christian.

Meanwhile, the market sees a 97% chance of a quarter of a percentage point rate cut at the Fed's meeting on Wednesday.

Gold, a non-yielding asset, typically performs well in a low-interest-rate environment.

While most analysts and investors see further highs for the yellow metal, even bringing $5,000/oz into view, some are skeptical about the sustainability of its recent huge rise.

Capital Economics analysts on Monday lowered their gold price forecast to $3,500/oz for end-2026.

"The 25% jump in prices since August is much more difficult to justify than previous moves during the gold rally," it said.

Spot silver fell 3.6% to $46.85 per ounce, platinum eased 0.4% to $1,592.03, and palladium lost 1.8% to $1,402.98.

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