Gold Weakens, Trade & Credit Issues in Focus
Gold steadied after Friday's sharp decline in the precious metal, with traders weighing the latest developments in trade tensions and concerns surrounding the credit exposure of regional US banks.
At the end of a volatile week, bullion closed 1.7% lower, its biggest daily decline since May. Silver also traded little changed on Monday after falling 4.3% in the previous session as pressure on London stocks eased. Technical indicators suggest that the explosive rally for both metals that began in August and pushed them to new records last week may have overheated, paving the way for a pullback.
Traders are now focused on the upcoming meeting between the US and China, after President Donald Trump expressed optimism last weekend that talks with Beijing could produce a deal to defuse the trade crisis, calling its threats of high tariffs unsustainable. Any concrete signs of progress could dampen demand for safe-haven assets like gold and silver.
However, investors remain uneasy about credit risks at US financial institutions after two regional lenders last week disclosed loan issues linked to alleged fraud. Problems at Zions Bancorp and Western Alliance Bancorp, both due to report results this week, could offer an early test of whether risky lending practices are emerging.
Precious metals have surged this year, with gold posting its ninth consecutive week of gains last week. Prices are up more than 60% so far in 2025, supported by central bank buying and inflows into exchange-traded funds. It has also benefited from surging demand for safe havens amid geopolitical and trade tensions, rising fiscal and debt levels, and threats to the Federal Reserve's independence.
Meanwhile, silver has performed even harder, surging about 80% this year, with gains driven by some of the same macroeconomic factors that support gold. In London, a lack of liquidity has sparked a worldwide rush for the metal as benchmark prices surged above New York futures. Spot gold fell 0.3% to $4,238.96 an ounce at 8:01 a.m. in Singapore. The Bloomberg Dollar Spot Index rose 0.1%. Silver prices were flat, while platinum and palladium weakened. (asd)
Source: Newsmaker.id
