Gold Weakens After US-Japan Trade Deal
Gold prices weakened slightly after a three-day rally following US President Donald Trump's announcement of a trade deal with Japan. Trump stated he would impose a 15% tariff on Japanese goods, but the deal also includes plans for $550 billion in Japanese investment in the US. This news eased some market concerns about a US tariff war, reducing demand for safe-haven assets like gold.
Spot gold prices fell as much as 0.3% to around $3,422 per ounce on Wednesday morning in Asia, after rising about 2.5% this week. Although prices are still about $80 below their record high above $3,500 per ounce in April, gold has performed strongly so far this year—up by about a third—driven by global uncertainties such as the conflict in Ukraine and the Middle East, as well as trade tensions.
Meanwhile, market attention is now focused on developments in US-China trade talks. US Treasury Secretary Scott Bessent said he will meet again with his Chinese counterpart in Stockholm next week to continue negotiations. The main goal of this meeting is to extend the tariff truce and expand the discussion space. Investors are still waiting for clarity on whether an agreement can be reached before the August 1 tariff deadline.
On the monetary policy front, market participants are also monitoring signals from the Fed ahead of next week's FOMC meeting. Although Fed Chairman Jerome Powell continues to face pressure from Trump to lower interest rates, Treasury Secretary Bessent expressed his support for Powell. These comments briefly lowered US Treasury yields on Tuesday, which is usually a positive sentiment for gold as the precious metal does not provide a yield.
Source: Newsmaker.id
