Gold Under Pressure, Trade Optimism Rises
Gold prices continued to weaken after previously falling 1.3%, fueled by market optimism regarding progress on a trade deal between the US and its trading partners. Spot gold was trading at around $3,389.77 per ounce in Singapore morning, near its lowest level this week. The decline followed reports that the European Union was prepared to accept 15% tariffs on most US exports, following a similar agreement with Japan, which also pledged $550 billion in investment.
This situation dampened interest in gold as a safe-haven asset, while US Treasury yields rose for the first time in six days. The rise in yields was a drag on gold, which does not pay interest. Meanwhile, US President Donald Trump continued to threaten to impose tariffs of 15% to 50% on countries like South Korea and India if a deal is not reached before the August 1 deadline. Market participants were also awaiting clarity on trade negotiations between the US and China.
In the interest rate market, market participants expect the Federal Reserve to hold interest rates at its meeting next week, but the odds of a quarter-point rate cut in September are as high as 60%. Lower interest rates typically support gold prices because they lower the opportunity cost of holding this precious metal. Through 2025, gold prices have risen by around 30% due to geopolitical tensions and uncertain global trade policies.
While gold held within a tight range, other precious metals also showed divergent movements. Platinum rose, while palladium fell. Silver briefly touched its highest level since 2011 on Wednesday before weakening slightly. Industrial demand for silver, particularly in clean energy technologies like solar panels, remains high. Rising borrowing costs and increased ETF holdings have also reduced the freely available supply of silver in the market. (ayu)
Source: Newsmaker.id
