Gold Falls Off a Five-Week High After the U.S. Reaches Tariff Deal With Japan
Gold futures fell off a five-week high midafternoon on Wednesday despite a weakening dollar as traders took profit after the metal touched a five-week high and the United States reached its first tariff deal with a major trading partner.
Gold for August delivery was last seen down US$45.50 to US$3,398.20 per ounce, after rising to the highest since the metal's June 13 record high of US$3,452.80 on Tuesday.
The drop comes after the Trump Administration said it reached a trade agreement with Japan that sees Tokyo's exports to the United States taxed at a 15% rate, including autos. Japan also promised to invest US$550 million in the United States, becoming the first country to reach a deal ahead of Donald Trump's Aug.1 deadline for trade deals.
"The deal, as reported, involves imposing a tariff of "only" 15 percent on imports from Japan, mainly in return for a promise by the Japanese government to invest $550 billion in the United States. It appears that Japan will create a sovereign wealth fund for that purpose, and that Trump will have a say in how it invests," economist Paul Krugman said in a Substack post.
The dollar moved lower, with the ICE dollar index last seen down 0.09 points to 97.3. Treasury yields moved higher, with the U.S. two-year note last seen paying 3.889%, up 3.7 basis points, while the yield on the 10-year note was up 4.3 points to 4.393%.
Source: MT newswires
