Gold (GC=F) prices fell below the $4,000 level on Monday as investors moved away from the safe-haven asset on prospects of a US-China trade deal.

Spot gold dropped to just below $3,980 per troy ounce while futures for December delivery fell 3% to around $4,010 as US and Chinese officials signaled a likely breakthrough in the trade standoff ahead of President Trump and Chinese leader Xi Jinping’s meeting this week.

Futures for the precious metal have been holding above $4,000 after suffering the biggest daily drop in more than a decade last Tuesday. Last week’s decline halted the biggest year-to-date rally in gold in more than 40 years, snapping a nine-week winning streak.

“Since 1975, there have been 16 other similar reversals, and while some of them did represent short or long-term peaks in gold’s price, there were also plenty of others that occurred within longer-term uptrends,” Bespoke Investment Group wrote in a note on Monday. “So, while gold definitely lost some of its luster last week, there’s still the potential that it only needs some polish.”

Despite the recent pullback, Wall Street remains bullish on gold going into next year.

“We continue to view gold as an effective portfolio diversifier, with further gains toward our upside case of USD 4,700 per ounce still possible should adverse macro and political developments emerge,” UBS Global Wealth Management chief investment officer Ulrike Hoffmann-Burchardi wrote. “For investors with an affinity for gold, we recommend using setbacks to add holdings if they are below our optimal mid-single-digit allocation in a diversified portfolio.”

Bank of America analysts recently reiterated their “long gold” recommendation, forecasting a peak of $6,000 per ounce by mid-2026.

Meanwhile, Goldman Sachs sees gold hitting $4,900 per troy ounce by the end of next year, up from its previous prediction of $4,300.

Read more: How to invest in gold in 4 steps

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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