(MENAFN) Gold tumbled about 3.2% on Monday to $3,981 an ounce, retreating from last week’s record high, as signs of easing US-China trade tensions and new Asian trade deals weighed on the market.

Recent declines in gold prices have coincided with US President Donald Trump hinting at a potential softening in trade disputes with China.

The precious metal hit an all-time peak of $4,381.6 last Monday, driven by escalating US-China tensions, expectations of Federal Reserve rate cuts, and central banks’ continued gold purchases for reserves.

But after Trump spoke of reaching a “fair deal” with Beijing, following his threats of 100% tariffs in response to China’s rare earth export restrictions, gold prices dropped sharply. Analysts said Trump’s ongoing three-country Asia tour, including new trade agreements with Cambodia and Thailand, also pressured prices.

A high-stakes meeting between Trump and Chinese President Xi Jinping is set for Thursday in South Korea, with both leaders expected to ease tensions that have spiked over the past two weeks.

Silver followed suit, declining 4.3% to $46.5 an ounce on Monday.

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