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Gold prices stabilized in Asian trade on Monday, following three consecutive days of declines, as optimism surrounding a new U.S.–EU trade deal curbed demand for the safe-haven asset and boosted overall market sentiment.
Gold Price Movements
- Spot Gold edged up 0.1% to $3,340.25 an ounce, while Gold Futures gained 0.1% to $3,396.70 per ounce as of 01:35 ET (05:35 GMT).
- Despite the recent uptick, gold saw two consecutive weekly declines, triggered by trade optimism and easing global trade tensions following a key U.S.–Japan trade deal.
U.S.-EU Trade Deal Lifts Market Sentiment
The U.S.-EU trade agreement, announced on Sunday, imposed a 15% tariff on most European goods entering the U.S., significantly lower than the previously threatened 30% tariff. This development helped avert a full-scale trade conflict and boosted market sentiment, lowering the demand for gold as a safe-haven asset.
- U.S. and China Trade Talks: Top officials from the U.S. and China are scheduled to meet in Stockholm on Monday to discuss extending their tariff truce by three months. Both sides have agreed to avoid imposing new duties before the August 12 deadline, which further raised optimism around trade relations and weighed on gold’s appeal.
Federal Reserve’s Upcoming Decision
Attention now turns to the Federal Reserve’s two-day meeting, which is set to conclude on Wednesday. The central bank is widely expected to maintain its benchmark interest rate at 4.25%–4.50%.
- Investors will closely monitor any shifts in tone regarding potential rate cuts later this year.
- The U.S. economic data due later in the week, including the July jobs figures and the PCE price index data, will further influence market sentiment and potentially affect gold prices.
Other Precious Metals Performance
- Silver Futures were largely muted at $38.368 per ounce.
- Platinum Futures rose 1.6% to $1,445.05 per ounce, reflecting positive sentiment in precious metals, while Copper Futures saw mixed movements:
- U.S. Copper Futures edged 0.2% lower to $5.775 per pound.
- Benchmark Copper Futures on the London Metal Exchange rose 0.4% to $9,790.25 per ton.
While the trade deal optimism has pushed investors towards riskier assets like equities, the Federal Reserve’s policy tone and upcoming U.S. economic data will likely play a crucial role in shaping the direction of gold prices. Gold’s movement remains tied to these macroeconomic developments as investors weigh the potential for further trade tensions, rate cuts, and economic signals.
