Washington: Gold prices dropped below the $4,000 mark on Tuesday as easing geopolitical tensions and growing optimism over global trade dampened demand for the precious metal. The decline comes despite a softer US dollar and expectations of interest rate cuts by the Federal Reserve, both of which typically support gold prices.

Spot gold fell nearly two percent to around $3,899 per ounce, its lowest level in three weeks. US gold futures for December delivery also declined by 2.6 percent. Analysts said the fall reflected a shift in investor sentiment as progress in trade discussions between the United States and China reduced the need for safe-haven assets.

Gold has been one of the year’s strongest-performing commodities, rising more than 50 percent and reaching an all-time high of about $4,381 per ounce earlier in October. However, with improving economic indicators and hints of policy easing from major central banks, traders appear to be locking in profits.

Market analysts remain divided over gold’s outlook. Some investment banks have revised short-term forecasts downward, with Citi estimating prices around $3,800 in the next few months, while others expect long-term gains driven by steady central bank demand and potential global uncertainties.

Meanwhile, global financial markets showed signs of stabilization. Stocks in the United States and Europe paused after recent record highs, while bond markets continued to factor in possible rate cuts in both the US and Canada. The dollar weakened slightly as traders anticipated dovish signals from upcoming central bank meetings.

In Riyadh, finance executives attending the Future Investment Initiative conference said the United States remains the world’s leading destination for investment despite concerns about slower growth. Investors are awaiting further clarity on monetary policy as the next round of US inflation data and the anticipated meeting between President Donald Trump and Chinese President Xi Jinping could set the tone for markets in the coming weeks.

Analysts say gold’s next moves will depend on the Federal Reserve’s policy direction, developments in US-China relations, and the performance of major equity markets. While the recent decline suggests a cooling of safe-haven demand, any renewed geopolitical or economic uncertainty could once again drive investors toward the precious metal.