Gold prices stabilize after a sharp drop amid anticipation of the Beijing and Washington talks

Gold steadied after the sharp decline seen in precious metals on Friday, with traders awaiting developments in trade tensions between the United States and China, and growing concerns about the exposure of US regional banks to credit risks. At the end of a week marked by volatility, the yellow metal closed down 1.7%, recording its biggest daily drop since May, while silver stabilized in Monday’s trade after falling 4.3% in the previous session as the supply shortage crisis eased in London. Technical indicators show that the strong rally in precious metals that began in August and pushed prices to record levels last week has reached an overbought stage, paving the way for possible declines. Anticipation of US-China talks Traders are now focusing on the upcoming meetings between the United States and China, after US President Donald Trump late last week expressed his optimism about the possibility of reaching an agreement that would ease the severity of the trade crisis, describing the high tariffs he threatened to impose as “unsustainable.” Any tangible signs of progress in the negotiations could lead to a decrease in demand for safe havens such as gold and silver. However, investors remain concerned about credit risks in the US banking sector, after two regional banks last week, Zions Bancorp and Western Alliance Bancorp, revealed loan problems linked to fraud allegations. The two banks are expected to announce their results this week, in an early test of the possibility of the emergence of high-risk lending practices. Also Read: Home Loan Fraud Scandal Rocks US Banks, Reveals Credit Gaps. Record gains for gold and silver since the start of the year. Precious metals have delivered exceptional performance since the start of 2025, as gold recorded its ninth consecutive weekly gain last week, rising more than 60% since the start of the year, supported by central bank purchases and flows of traded funds in… Stock Exchange. The metal also benefited from strong demand for safe havens in the face of geopolitical and trade tensions, high levels of debt and fiscal deficits, in addition to concerns about the independence of the Federal Reserve. As for silver, it has risen at a stronger pace, up about 80% since the start of the year, driven by the same factors that supported gold. In London, the lack of liquidity led to a global buying wave of silver after reference prices jumped above futures in New York. Bringing balance back to the market During the past two weeks, more than 20 million ounces of silver were withdrawn from warehouses linked to the COMEX stock exchange in New York, and it is likely that much of it went to London to help ease the shortage in supply. Also read: A historic scarcity of silver shares on the London Stock Exchange sends prices soaring. Although the price difference between the two markets is still around $1.35 per ounce, it has clearly fallen from a high of $3 last week. A large outflow of 10 million ounces was also recorded from silver-backed ETFs on Thursday. By 08:01 in Singapore, spot gold was down 0.3% at $4,238.96 an ounce, while the Bloomberg Dollar Index was up 0.1%. Silver stabilized unchanged, while platinum and palladium prices fell.