Gold Drops to $3,378 Amid US Trade Optimism
Gold prices weakened as demand for safe-haven assets eased after apparent progress emerged in trade talks between the United States and its major partners. Spot gold fell 0.3% to $3,378.76 per ounce at 11:22 a.m. Singapore time, after earlier weakening to near $3,375 per ounce. This came after reports suggested the European Union was prepared to accept 15% tariffs on most of its exports to the US, following a similar agreement reached by Japan with a pledge of $550 billion in investment.
This development also pushed up US Treasury bond yields, which typically weigh on gold prices because the precious metal offers no yield. However, the market remains cautious as President Donald Trump continues to threaten to impose tariffs of between 15% and 50% on other countries such as South Korea and India if no deal is reached before the August 1 deadline. Negotiations with China are also a major concern for market participants.
So far this year, gold has risen more than 25% as global concerns, including geopolitical tensions in Ukraine and the Middle East, have driven investors to safe-haven assets. However, since hitting a record high above $3,500 per ounce last April, gold prices have moved within a narrow range due to uncertainty about monetary policy direction and improving global market sentiment.
Meanwhile, market participants now expect the Federal Reserve to keep interest rates unchanged at its July meeting. However, there are expectations of a 25 basis point cut in October, with a roughly 60% chance of an earlier cut in September. Lower borrowing costs typically support gold prices. Meanwhile, prices for silver, platinum, and palladium have also weakened after previously reaching multi-year highs.
Source: Newsmaker.id
