Royal Gold (RGLD) shares plummeted 5.24% in pre-market trading on Monday, as the precious metals company felt the impact of a significant drop in gold prices. The decline in gold, a key driver for Royal Gold's business, was triggered by positive developments in US-China trade talks and easing geopolitical tensions, which diminished the metal's appeal as a safe-haven asset.

Gold prices fell as much as 3% in early Asian trading, dropping below $3,220 an ounce. This decline came after the United States and China reported "substantial progress" following two days of trade discussions in Switzerland. The US dollar's strengthening also contributed to making gold more expensive for most buyers, further pressuring gold-related stocks like Royal Gold.

The pre-market drop in Royal Gold's stock price aligns with the broader trend observed in the gold mining sector. Other major gold stocks, including Gold Fields, Harmony Gold, and Newmont Mining, also experienced significant declines in overnight and pre-market trading, with some falling as much as 10%. While short-term pressure on gold prices may continue if trade talks progress, analysts suggest that support levels around $3,200 could lead to an eventual move towards fresh record highs, potentially offering a glimmer of hope for gold investors in the long term.