Gold is trading higher in mid-European trading today, Monday, October 20, the opening session of the week, after recording losses of more than 1.7% at the end of last week’s trading, coinciding with a wave of profit-taking. This marked the largest daily loss since May, following successive record levels reached by the yellow metal after testing $4,375 per ounce. The metal resumed its rise today, as markets monitored trade developments between Washington and Beijing this week. The yellow metal is trading up about 1.50% at $4,319 per ounce, while silver is trading at $52.23 per ounce, up 0.75%.

Markets are monitoring the upcoming US-China meeting this week as the US government continues to shut down the upcoming US-China meeting, after the US President indicated that he is optimistic that talks with Beijing officials may lead to an agreement to defuse the trade dispute and that his threat to impose high tariffs is unsustainable.

Meanwhile, official demand and holdings of gold exchange-traded funds (ETFs) are a key factor in gold’s gains, which have been on track for their ninth consecutive week of gains, rising more than 60% since the beginning of the year. This is supported by central bank purchases and fund inflows. Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council, noted that central banks currently account for approximately 20% of global gold demand.

Silver, on the other hand, stabilized after last week’s declines, reaching record highs of $54.46 per ounce, marking a rise of more than 80% over the year. Reports indicated that approximately 20 million ounces of silver were withdrawn from warehouses linked to the CMC Futures Exchange in New York, potentially heading to London to alleviate the shortage. Meanwhile, 10 million ounces of silver-backed ETFs were withdrawn by the end of last week’s trading, further supporting silver’s declines at the end of the week.

Markets are awaiting the US Federal Reserve’s October 28-29 meeting next week, with expectations rising that the Fed will cut interest rates next week and its December meeting. Markets are pricing in a 99% and 94% probability of a 25 basis point rate cut in October and December, respectively, according to the CME’s Fed Watch tool.

Platinum is trading at $1,604, down 0.34%, while palladium is down 1.14%, trading at $1,458.