- Gold prices will expand its shortcomings to nearly USD 3,025 at the early Asian Conference on Monday.
- Hope for a peace agreement between Ukraine is to undermine the assets of safe shelters like gold.
- The Fed steadily maintained prices but gave forecasts for two cuts.
XAU/USD Slips Below $3,025 in Asian Session
Gold prices (XAU/USD) extended their decline to approximately $3,025 during the early Asian session on Monday. The yellow metal retreated after reaching a record high on Thursday, as optimism surrounding a potential Ukraine peace deal reduced safe-haven demand. However, expectations of Federal Reserve (Fed) rate cuts and ongoing economic uncertainties may prevent further downside pressure.
Ukraine Peace Talks Weigh on Gold Demand
Over the weekend, officials from Ukraine and the United States met in Riyadh, Saudi Arabia, to continue diplomatic efforts aimed at resolving the conflict. Ukrainian Defense Minister Rustem Umerov described the discussions as “productive and focused,” emphasizing proposals to safeguard energy facilities and critical infrastructure. Additionally, US and Russian representatives are scheduled to hold separate talks on Monday. The prospect of a ceasefire between Russia and Ukraine has led to a decline in gold’s appeal as a safe-haven asset.
Fed Rate Cut Expectations Could Support Gold
Despite geopolitical developments, gold’s losses may be limited by growing expectations of Federal Reserve rate cuts. The Fed maintained interest rates in both January and March meetings, citing the need for further progress on disinflation. Recent projections suggest the possibility of two rate cuts in 2025.
Fed Chair Jerome Powell also commented on US economic policies, stating that tariffs imposed under President Donald Trump may have contributed to slower economic growth and increased inflation. While gold has yet to act as a safe-haven asset for retail investors, economic uncertainty could drive increased demand for the metal in the future, according to Alex Ebkarian, Chief Operating Officer at Allegiance Gold.
