Safe-haven gold falls as US-Japan trade deal eases some uncertainty
Gold prices fell on Wednesday as a U.S.-Japan trade deal announced by U.S. President Donald Trump lifted risk appetite, while a rebound in the dollar and Treasury yields added further pressure.
Spot gold was down 0.2% at $3,423.08 per ounce, as of 0804 GMT, after hitting its highest point since June 16 earlier in the session.
U.S. gold futures also slipped 0.2% to $3,435.90.
Trump struck a trade deal with Japan that lowered tariffs on auto imports and spared Tokyo punishing new levies on other goods in exchange for a $550 billion package of U.S.-bound investment and loans.
"Spot gold is paring some of its gains as the U.S.-Japan trade deal diluted demand for safe havens. The U.S. dollar's slight rebound is also weighing on bullion, though it's only natural that bullion bulls take a breather after the 3-day rally," said Han Tan, chief market analyst at Nemo.Money.
The U.S. dollar index edged up 0.1% against its rivals, while benchmark 10-year U.S. Treasury yields rebounded from near-two-week lows.
Higher bond yields increase the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies.
U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal, U.S. Treasury Secretary Scott Bessent said.
Investors are also focussed on the U.S. Federal Reserve's policy meeting scheduled for July 29-30, with market expectations that rates will be held steady.
"Gold would likely need a major dovish signal out of next week's FOMC meeting to bolster its chances for a new record high," Tan said.
Elsewhere, spot silver fell 0.3% to $39.18 per ounce, platinum rose 0.6% to $1,450.48 and palladium gained 0.6% to $1,282.76.
Source : Reuters
