Gold recovered slightly after dropping below $4,000 an ounce on Monday, as progress in US-China trade talks reduced demand for safe-haven assets. The metal edged higher Tuesday after a 3.2% slump, following announcements from Washington and Beijing that they had reached agreements on tariffs and export controls.

Treasury yields rose despite expectations of a Fed rate cut this week, pressuring non-interest-bearing gold. After hitting a record above $4,380 last Monday, gold has retreated but remains over 50% higher this year, supported by central-bank purchases and investor demand driven by concerns over fiscal deficits.

Chris Weston, head of research at Pepperstone Group, noted that “crowded longs can unwind quickly when leveraged traders rush to lock in profits,” adding that continued lower lows make it difficult to call a bottom.

Citigroup analysts led by Max Layton said gold’s downward momentum, improved US-China relations, and the likely end of the US government shutdown could push prices lower in the coming weeks, projecting a decline to $3,800 an ounce within three months.