Gold prices plummet, reaching a three-week low

Gold prices continued to fall in the session on October 28, approaching a three-week low, due to optimism about the possibility of reaching a trade deal between the US and China weakening demand for this precious metal, while investors awaited a series of policy decisions from major central banks during the week.

Spot gold prices fell sharply to $3,906.5 an ounce at 3:50 p.m. on October 28 (Vietnam time). The December gold contract in the US recorded at 1:52 p.m. Vietnam also decreased by 1.5%, to 3,957.5 USD/ounce.

The frozen US-China trade relationship has partly caused gold prices to fall due to the decline in safe-haven cash flow, said Mr. Tim Waterer, chief market analyst at KCM Trade.

Over the weekend, top US and Chinese economic officials agreed a framework for US President Donald Trump and Chinese President Xi Jinping to consider this week.

If the meeting between Mr. Trump and Mr. Tap goes smoothly, gold prices may have to swim in the opposite direction. However, this could be offset if the Federal Reserve signals easing at this week's policy meeting, Waterer added.

Mr. Trump expressed his confidence that an agreement with China will be reached soon, and announced a series of important trade and mineral agreements with four Southeast Asian countries in the first phase of his 5-day trip to Asia.

The Asian stock market continues to maintain its upward momentum as expectations of a global trade ease help risk-off sentiment increase.

Investors are awaiting the results of the Fed meeting on October 30, with the FED forecasting a rate cut, while paying attention to Chairman Jerome Powell's orientation statements. The European Central Bank (ECB) and the Bank of Japan (BOJ) are expected to keep interest rates unchanged this week.

Since the beginning of the year, gold prices have increased by about 53%, reaching a record of 4,381.21 USD/ounce on October 20, supported by economic and political instability, expectations of interest rate cuts and buying activities of central banks.

For other precious metals, spot silver fell 0.8% to $46.51/ounce, platinum fell 2.6% to $1,549.85/ounce, and gold fell 1.2% to $1,385.50/ounce.