XAU/USD continued its slide towards $4,000 as the week opened, with the decline continuing as market players took profits after breaking its record high in recent weeks.
At 9.20am, gold was at $4,093, down 0.47% since it opened early Monday in Asian trading.
For now, renewed confidence in major markets is focused on the US-China tariff talks, bolstering support for the US dollar from further declines.
US Treasury Secretary Scott Bessent said on Sunday that the US and China have agreed on a framework for a potential trade deal that will be discussed when US President Donald Trump and Chinese President Xi Jinping meet this weekend.
Bessent went on to say that he expects China to delay implementing its high licensing tariffs on rare earth minerals and magnets for a year while the policy is reviewed.
In contrast, softer US inflation data released on Friday reinforced expectations of a rate cut from the US Federal Reserve (Fed).
Markets are pricing in a near certainty that the Fed will cut its benchmark overnight lending rate by 25 basis points from its current target range of 4.0%-4.25%.
Traders are also expecting another cut in December.
Lower interest rates could reduce the cost of gold holders, supporting the precious metal to move higher.
