Gold prices fall as hopes of easing US-China tensions dent safe-haven appeal

Gold (GC=F)

Gold prices dropped on Tuesday morning, as hopes of progress in US-China trade talks dented the appeal of the precious metal as a safe-haven asset.

Gold futures (GC=F) slid 1.5% to $4,296.30 per ounce at the time of writing, while spot gold dropped 2.6%% to $4,357.35 an ounce.

US president Donald Trump said on Monday that he expected to reach a trade deal with China, following a recent resurgence in tensions between Beijing and Washington.

Read more: Stocks rise as UK government borrowing in September hits highest for five years

According to a Reuters report, Trump told reporters: "I think we'll end up with a very strong trade deal Both of us will be happy."

Trump is expected to meet with China's president Xi Jinping in South Korea next week, ahead of the US president's threatened deadline to put an additional 100% tariff on China from 1 November.

A flaring up of trade tensions over the past week has seen investors flock to gold, which is considered to act as a safe haven in times of uncertainty, pushing the precious metal to all-time highs.

COMEX - Delayed Quote•USD

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4,278.10

-81.30

(-1.86%)

As of 5:05:35 AM EDT. Market Open. Advanced Chart

Oil (BZ=F, CL=F)

Oil prices fell on Tuesday morning to trade at a five-month low amid continued concerns about oversupply in the market.

Brent crude (BZ=F) futures fell 0.4% to $60.76 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) declined by 0.5% to $57.23 a barrel.

Fears about an oversupply of oil have continued to weigh on prices, with the International Energy Agency (IEA) warning on Friday that the global market "may be at a tipping point as signs of a significant supply glut emerge".

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The IEA said that a recent surge in supplies from the Middle East and the Americas pointed to an "untenable" surplus of nearly four million barrels per day in 2026.

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: "Traders are increasingly concerned about the sheer quantity of supplies of crude oil out there. Successive production increases from the OPEC nations have raised output, but much of that extra output has simply been loaded onto tankers and left floating at sea, unsold.

"Traders know that sooner or later these floating supplies will hit the market, which could send crude prices down further."

NY Mercantile - Delayed Quote•USD

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61.10

+0.09

+(0.15%)

As of 5:04:43 AM EDT. Market Open. Advanced Chart

Pound (GBPUSD=X, GBPEUR=X)

The pound edged 0.2% lower against the dollar (GBPUSD=X) on Tuesday morning, to trade at $1.3382, following data which showed a further rise in UK government borrowing.

Data released by the Office for National Statistics (ONS) on Tuesday showed that public sector net borrowing in the UK, excluding banks, reached £20.2bn in September.

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CCY - Delayed Quote•USD

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1.3378

-0.0030

(-0.23%)

As of 10:14:56 AM GMT+1. Market Open. Advanced Chart

The figure marks a sharp increase of £1.6bn from the same month in 2024, and represents the highest borrowing for the month of September in five years.

Danni Hewson, head of financial analysis at AJ Bell (AJB.L), said: "This set of government borrowing figures lays bare the tough job Rachel Reeves faces to try and balance the country’s books.

"The chancellor has hiked taxes on employers, announced infrastructure investments and planning reforms, and today promises to cut red tape for businesses. But all those tax-raising, growth-inducing measures haven’t been able to offset the weight piling up on the other end of the seesaw."

In other currency moves, the the pound was little changed against the euro (GBPEUR=X) on Monday morning, trading at €1.1512.

CCY - Delayed Quote•USD

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1.1508

-0.0002

(-0.02%)

As of 10:14:56 AM GMT+1. Market Open. Advanced Chart

More broadly, the FTSE 100 (^FTSE) rose 0.2% in early European trading to 9,423 points. For more details on market movements check our live coverage here.

Read more:

UK economy grows slightly as Reeves faces tough calls in autumn budget £30bn of tax rises and spending cuts expected in autumn budget, warns Goldman Sachs UK inflation to rise to highest in G7, warns IMF

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