Decline in Gold Prices.. Following Progress in Trade Talks

SadaNews - Gold continued its decline as demand for safe assets waned, following progress in trade talks between the United States and its major partners.

The spot gold price fell to around $3,375 an ounce, after losing 1.3% in the previous session, following a report published by "Bloomberg" indicating that the European Union may be willing to accept a 15% tariff on most of its exports to the United States.

This came after a similar agreement with Japan, which included a commitment from the Asian nation to inject $550 billion in investments.

This led to a rise in U.S. Treasury yields, which is a negative factor for gold that does not yield interest.

However, optimism was met with caution in the markets due to ongoing threats from U.S. President Donald Trump to impose tariffs ranging from 15% to 50% on other countries such as South Korea and India, which are still trying to reach agreements before the tariffs take effect on August 1. Traders are also looking for clearer signals regarding the progress of talks with China.

Trump's Policies Pressure Prices

Gold has risen by more than 25% since the beginning of the year, bolstered by uncertainty surrounding Trump's attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, which have pushed investors towards safe havens.

Gold has fluctuated within a narrow range in recent months, after reaching a record level above $3,500 an ounce in April.

Elsewhere, cash markets are betting that the Federal Reserve will keep interest rates unchanged during its July meeting.

However, traders expect at least one cut of a quarter percentage point by October, with a 60% chance of a cut in September. Low borrowing costs are a positive factor for gold, which does not yield returns.

As of 11:22 AM Singapore time, the spot gold price had declined by 0.3% to $3,378.76 an ounce. The "Bloomberg" dollar index fell by 0.1%, decreasing by more than 1% since the beginning of the week.

In other metals, silver fell after reaching its highest level since 2011 on Wednesday. Both platinum and palladium also decreased.