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(Bloomberg) -- Gold slid below $4,000 an ounce, extending losses from the worst rout in over a decade as progress on a US-China trade deal sapped haven demand.

Spot gold fell as much as 3.2% below $3,990 an ounce, following last week’s abrupt halt to rapid advances on concerns the record-breaking rally had run too far. Chinese and US trade negotiators have lined up an array of diplomatic wins for President Donald Trump and counterpart Xi Jinping to unveil at a summit this week. A trade agreement between the world’s two biggest economies may ease some of the economic risks and geopolitical tensions that have bolstered the precious metal.

A blistering rally that propelled gold to a record high just above $4,380 an ounce last Monday has since gone into reverse on signs the metal had become overbought. The so-called debasement trade and bets on Federal Reserve rate cuts had been the recent drivers of gains, bringing in retail speculators that helped send prices to overbought territory. Gold is still up by more than 50% this year, underpinned by strong buying from global central banks.

“Gold is going through a long overdue correction, with the driver today being the positive noise on the trade talk front,” said Ole Hansen, head of commodities strategy at Saxo Bank. “We may have seen the high for the year as a deeper correction may take longer to recover from as traders turn a bit more cautious, and the stock market continues higher.”

Nearly 1,000 professional gold traders, brokers and refiners have descended on Kyoto in Japan for a conference run by the London Bullion Market Association. Attendance at the gathering — which began on Sunday — is at a record high, with a growing talent war for bullion traders.

Central bank demand isn’t as strong as it was, and a deeper correction might be welcomed by professional dealers, John Reade, market strategist at the World Gold Council, said at the LBMA event. He cited conversations at the conference that suggested $3,500 an ounce as a level that “would be healthy for the gold market, because it still would be a ridiculously high price.”

This week is a busy one for central-bank announcements, with the Federal Reserve, European Central Bank and Bank of Japan set to make decisions. The Fed is forecast to cut by 25 basis points, while the ECB and BOJ are expected to leave rates unchanged. Lower borrowing costs typically benefit bullion as it pays no interest.

What Bloomberg strategists say...

“Gold looks set for a deeper short-term pullback as exchange-traded fund flow activity remains volatile. ...The earlier rally drew in fast money that’s now being forced out. But underneath the turbulence, the long-term case remains intact.”

-Nour Al Ali, Macro Markets & Squawk. Click here for the full analysis.

Spot gold fell % to $ an ounce as of  in New York, after losing 3.3% last week.

--With assistance from Preeti Soni and William Clowes.