Gold Holds Drop as US-EU Trade Deal Provides Boost for Dollar
Gold held a decline after the dollar rose the most since May following a tariff deal between the US and the European Union, with investors now focusing on prospects for an extension of a trade truce between Washington and Beijing.
Bullion traded near $3,312 an ounce, following a 0.7% decline on Monday. The greenback jumped — putting it on track for its first monthly gain this year — and the euro sank amid renewed fears that 15% duties on European exports may impact global growth. A stronger dollar makes gold more expensive for most buyers.
Investors were also monitoring talks between the US and China in Stockholm, as Commerce Secretary Howard Lutnick said a 90-day extension of an earlier trade truce was a “likely outcome.” With President Donald Trump’s Aug. 1 tariff deadline fast approaching, several other trading partners — including South Korea and Brazil — are still racing to secure agreements.
Gold is up by more than a quarter this year, with uncertainty around Trump’s aggressive attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, spurring a flight to safety. Still, the precious metal has been trading within a tight range over the past few months after spiking to an all-time high above $3,500 an ounce in April.
Spot gold was down 0.1% to $3,312.07 an ounce at 8 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady, following a 0.8% gain in the previous session. Silver was flat, while platinum and palladium rose.
Investors will this week be parsing through a raft of key data from jobs to inflation and economic activity, while the Federal Reserve is expected to keep rates unchanged. Lower borrowing costs tend to benefit bullion, as it doesn’t pay interest.
Source: Bloomberg
