Drop in Gold Prices Amid Rising Dollar

SadaNews - Gold fell as the dollar continued to rise in July, following the announcement of a customs agreement between the United States and the European Union, which eased some concerns over a potential painful trade war between the two economies.

Despite ongoing questions about the scope of the trade agreement, it has raised hopes for an extension of the trade truce with China, at a time when American and Chinese officials are engaged in two days of talks in Stockholm. This has weakened demand for gold as a safe haven.

Anticipation of Federal Reserve's Decision on Interest Rates

Investors are also monitoring a crucial week of data that is likely to affect the direction of markets and the economy for the remainder of the year.

While the Federal Reserve is expected to keep interest rates unchanged, traders will scrutinize the Fed's comments for signs of its monetary policy direction. Gold prices often benefit from lower borrowing costs, as it does not yield interest.

Gold has risen by more than a quarter of its value this year, driven by uncertainty surrounding President Donald Trump's aggressive attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, which have boosted demand for safe-haven assets.

Spot gold price dropped by 0.7% to $3,313.18 per ounce at 2:22 PM in New York. The Bloomberg Dollar Spot Index rose by 0.8%. Silver and platinum prices fell, while palladium rose.