Gold prices held steady on Monday after a sharp selloff in precious metals last week, as investors weighed renewed optimism over US-China trade discussions against lingering concerns about US regional banks’ credit exposure.
Bullion slipped 1.7% on Friday — its biggest single-day drop since May — ending a volatile week that saw traders lock in profits after gold’s nine-week rally. Silver also paused after tumbling 4.3% in the previous session, as easing pressure on London stockpiles cooled a recent buying frenzy. Analysts suggest the metals’ powerful rally, which drove them to record highs last week, may have overheated, prompting a short-term correction.
Market attention is now turning to upcoming talks between Washington and Beijing. President Donald Trump recently struck an optimistic tone, hinting that the ongoing tariff standoff could ease through mutual negotiation. Any progress on trade could reduce demand for traditional safe-haven assets such as gold and silver.
Still, investor nerves remain frayed by fresh signs of stress in the US banking sector. Regional lenders Zions Bancorp and Western Alliance Bancorp disclosed potential loan losses tied to alleged fraud cases, raising questions about broader credit risks in the financial system. Both banks are set to report earnings this week, offering a key test for market sentiment.
Despite the latest pullback, gold remains one of 2025’s standout performers — up more than 60% this year, supported by central-bank buying, robust ETF inflows, and persistent geopolitical uncertainty. Silver has soared even further, climbing roughly 80%, fueled by strong industrial demand and tightening global supplies.
Physical markets also remain in flux. Over the past two weeks, more than 20 million ounces of silver have been withdrawn from New York’s Comex warehouses, likely rerouted to London to ease supply strains there. The price gap between London and New York has narrowed to about $1.35 an ounce from $3 last week, while silver-backed ETFs saw a 10-million-ounce outflow on Thursday.
As of 8:01 a.m. in Singapore, spot gold dipped 0.3% to $4,238.96 an ounce, while the Bloomberg Dollar Spot Index inched up 0.1%. Silver was little changed, with platinum and palladium also edging lower as traders awaited new market cues.