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Gold prices held steady near three-week lows on Tuesday, with a stronger U.S. dollar and easing global trade tensions limiting demand for the safe-haven metal. Investors are awaiting a key U.S. Federal Reserve policy decision due this week, which has added caution to market sentiment.
Gold Price Movements
- Spot Gold: Up 0.2% at $3,319.25 an ounce
- Gold Futures: Up 0.2% at $3,374.70/oz by 01:12 ET (05:12 GMT)
Gold has declined for four consecutive sessions, as recent U.S. trade progress reduced demand for haven assets. The market was also subdued by optimism from U.S.–EU trade talks.
Stronger Dollar, U.S.-EU Deal Diminish Gold’s Appeal
The U.S. Dollar Index remained in positive territory, rising more than 1% on Monday, boosted by the U.S.–EU trade framework agreement announced on Sunday. The agreement reduced the threat of higher tariffs between the two major economies, supporting a stronger dollar.
A stronger dollar typically makes gold more expensive for overseas buyers, which dulls demand for the metal.
Analysts suggest that the easing trade tensions between the U.S. and EU have reduced the near-term demand for safe-haven assets like gold, as investors shift toward riskier assets.
Awaiting U.S. Federal Reserve Meeting
Attention now turns to the U.S. Federal Reserve’s policy meeting, which began on Tuesday, with a decision expected on Wednesday. The central bank is widely expected to keep interest rates unchanged at 4.25%-4.50%.
However, market participants will be closely watching for any signals about future monetary policy that could impact the dollar and gold prices. The Fed’s stance on interest rates could be pivotal, as any hawkish or dovish indications will influence market sentiment.
Upcoming U.S. Economic Data
Traders are also awaiting a series of U.S. economic data releases this week, including:
- Second-quarter GDP
- PCE inflation figures
- Monthly jobs report
These data points will provide further clues about the state of the U.S. economy and influence both the Fed’s policy stance and broader market direction.
Other Metal Markets and Copper News
- Platinum Futures fell 0.5% to $1,418.05/oz.
- Silver Futures rose 0.2% to $38.313/oz.
In the copper market, U.S. Copper Futures dropped 0.4% to $5.60 per pound. Copper prices also fell by nearly 3% on Monday, after Chile’s finance minister stated that the country would push for an exemption from a U.S. tariff on copper.
As copper is a key industrial metal, any tariff-related disruptions can affect global copper supply and demand dynamics, further influencing metal prices.
Gold remains in a range-bound pattern as investors digest trade developments and await the U.S. Federal Reserve’s decision on interest rates. A stronger dollar and reduced trade tensions are weighing on gold prices, while market participants remain cautious ahead of U.S. economic data later this week.
