Gold stages rebound on dollar weakness; US, EU ink tariff deal
Gold prices gained in choppy trading on Monday, as a weaker dollar helped to offset pressure from improved risk appetite after United States and European Union announced a trade framework agreement.
Spot gold was up 0.2% at $3,342.62 per ounce, as of 0421 GMT, after touching its lowest level since July 17. U.S. gold futures edged 0.2% higher to $3,342.90.
The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods - half the threatened rate - and averting a bigger trade war between the two allies that account for almost a third of global trade.
However, the agreement left key issues unresolved, including tariffs on spirits.
The agreement eased transatlantic trade tensions, putting pressure on gold, said Jigar Trivedi, a senior commodity analyst at Reliance Securities, adding that it also softened the dollar index, which provided some cushion to bullion.
The U.S. dollar index eased 0.1%, making greenback-priced bullion more affordable for overseas buyers.
Risk sentiment improved following the agreement, with European currencies and U.S. stock index futures trading higher.
Meanwhile, senior U.S. and Chinese negotiators are set to meet in Stockholm later in the day to address long-standing economic disputes, seeking to extend a truce that has prevented higher tariffs.
"In the short term, we don't expect gold to experience wild swings. Investors are turning their focus to a pivotal week for U.S. monetary policy and economic data," Trivedi said.
The Federal Reserve is expected to maintain its benchmark interest rate in the 4.25%-4.50% range after its two-day policy meeting concludes on Wednesday.
U.S. President Donald Trump said on Friday he had a positive meeting with Powell, suggesting the Fed chief might be inclined to lower interest rates.
Spot silver was up 0.2% at $38.21 per ounce, while platinum gained 1.2% to $1,417.67 and palladium rose 2.9% to $1,254.98.
Source: Reuters
