Safe-haven gold drifts lower on trade optimism
Safe-haven gold prices slipped on Tuesday, hurt by some optimism over trade deal between U.S. and its trading partners, while a firmer U.S. dollar and rising Treasury yields added further pressure.
Spot gold eased 0.4% to $3,322.93 per ounce, as of 1325 GMT. U.S. gold futures fell 0.3% to $3,332.30.
The benchmark 10-year note yield hit a more than two-week high, making non-yielding gold less attractive, while dollar edged 0.2% higher.
Powerhouse Asian economies Japan and South Korea said on Tuesday they would try to negotiate with the U.S. to soften the impact of sharply higher tariffs that President Donald Trump now plans to impose from the start of August.
Trump reignited his trade war on Monday, warning 14 nations that they would face higher tariffs. However, with the start date pushed back to August 1, countries were focusing on the new three-week window to press for an easier ride.
"Focus is on trade as the July 9 deadline nears, with the Trump administration ramping up pressure. But some optimism related to trade deals is fuelling risk-on sentiment, keeping gold subdued," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Meanwhile, markets are awaiting the minutes of the U.S. Federal Reserve's latest policy meeting due on Wednesday with several Fed officials set to speak this week for more insights into the economy and central bank's policy path.
"The lingering threat to inflation from tariffs will probably persuade the Fed to hold off cutting interest rates until next year and this will put a lid on gold prices," Hamad Hussain, climate and commodities economist at Capital Economics.
Investors are currently anticipating 50 basis points worth of Fed rate cuts by the end of this year, starting in October.
Spot silver lost 0.5% to $36.57 per ounce, platinum fell 0.8% to $1,359.97 and palladium eased 0.2% to $1,108.77.
Source: Reuters
