Gold (XAU/USD) continued its decline on Tuesday (October 28th) as investors shifted away from safe-haven assets amid a resurgent risk-on sentiment. At the time of writing, XAU/USD was trading around $3,925, down nearly 1.3% on the day, after briefly dipping below $3,900, marking its lowest level in three weeks.

The risk-on mood was fueled by optimism surrounding a potential US-China trade truce, with attention focused on the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping, scheduled for Thursday on the sidelines of the APEC Summit in South Korea.

The precious metal has now retreated about 10% from last week's all-time high of $4,381, as traders continue to book profits and rebalance portfolios after its historic rally. This decline reflects a healthy correction, with some investors repositioning ahead of the Federal Reserve's interest rate decision due on Wednesday.

The market is almost certain that the Fed will cut interest rates for the second time after the quarter-point cut in September, the first since December 2024. However, with a rate cut largely priced in, the focus will be on Fed Chairman Jerome Powell's remarks. A dovish tone could revive demand for non-yielding precious metals by reinforcing expectations of further monetary policy easing, while a hawkish bias could limit upward momentum and keep gold stuck near recent lows. (alg)

Source: FXstreet