Gold Down as Safe-haven Demand Eases After Trump Delays EU Tariffs
Gold fell as its safe-haven status was dented by signs President Donald Trump may be easing his aggressive stance on trade with the European Union, after he extended the deadline for sweeping tariffs.
Bullion prices were trading near $3,350 an ounce, after rising nearly 5% last week, as Trump announced Sunday that his plan to hit the European Union with 50% tariffs would be delayed until July 9 to give the two sides time to negotiate a deal. The U.S. leader on Friday had threatened higher-than-expected levies on the bloc, while also warning Apple Inc. that it would face 25% tariffs if it did not make iPhones in the U.S.
The trade war unleashed by the new U.S. administration has helped push gold up more than a quarter this year, with prices currently trading about $150 below an all-time high set last month.
While a softer stance on trade would dampen demand for safe-haven assets, gold’s appeal as a safe haven has strengthened amid growing concerns about the U.S. government’s fiscal position after Moody’s Ratings this month removed the U.S.’s top credit rating. Investors worry that Trump’s signature tax bill that passed the House last week and now heads to the Senate will further balloon the deficit.
Looking ahead, traders will digest a slew of economic metrics due this week such as durable goods and home sales, as well as a measure of consumer sentiment. U.S. markets will be closed on Monday for the Memorial Day holiday.
Spot gold fell 0.3% to $3,346.82 an ounce as of 7:22 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady. Silver and palladium were little changed.
Meanwhile, platinum extended gains after hitting a two-year high on Friday. The metal rose 11% last week, its biggest weekly gain in more than four years, as concerns about the deficit and renewed demand for jewelry in China added to the tightness in the market.
Source: Bloomberg
