Gold Holds Decline as US-EU Trade Deal Eases Some Haven Demand
Gold steadied after the US and European Union announced they had reached a tariff agreement, staving off some concerns about a potentially painful trade war between the economies.
Bullion traded near $3,330 an ounce — following a 0.4% weekly loss — as investors weighed the outlook for the global economy in the wake of the deal, which will see the EU face 15% levies on most of its exports including automobiles. Still, there are lingering questions about the scope of the pact, including details over the impact on metals — signaling potential challenges when it comes to implementation.
With several countries still racing to secure agreements with the US ahead of an Aug. 1 deadline, investors continue to seek clarity on progress with China in particular. The South China Morning Post reported that the two sides are expected to extend their tariff truce by another three months, citing unnamed sources, ahead of senior trade talks due from Monday in Stockholm.
Gold is up more than a quarter this year, with uncertainty around US President Donald Trump’s aggressive attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, driving demand for havens. After bullion spiked to an all-time high above $3,500 an ounce in April, the latest report from the Commodity Futures Trading Commission showed money managers have boosted bullish wagers to the highest in 16 weeks.
Investors will be watching a pivotal week of data that’s likely to set the tone for the rest of the year in markets and the economy. While the Federal Reserve is expected to keep interest rates unchanged, traders will pore over its commentary for clues about its monetary path. Lower borrowing costs tend to benefit gold, as it doesn’t pay interest.
Spot gold was down 0.1% to $3,332.67 an ounce at 7:42 a.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.1%. Silver was little changed, while platinum and palladium rose.
Source: Bloomberg
