Gold Extends Drop As Extended US Negotiations Ease Trade Fears
Bullion fell as much as 0.5% to around $3,285 an ounce, adding to a 1% loss in the previous session
Gold extended a decline after President Donald Trump said the new August deadline for the start of so-called “reciprocal” tariffs won’t be delayed, with nations expected to use the extended window to continue negotiating with the US.
Bullion fell as much as 0.5% to around $3,285 an ounce, adding to a 1% loss in the previous session. Trump’s move to postpone the enforcement of all “Liberation Day” duties — which were first announced in April and then delayed to July 9 — to next month is partly an effort to clinch more agreements from nations still willing to deal with the US. That’s eased some fears about a worst-case-scenario for global trade, denting haven demand for the precious metal.
While the delay has allayed some concerns about the potential negative impact that Trump’s tariff agenda could have on the global economy, the president also indicated on Tuesday that he could announce substantial new rates on imports of copper and pharmaceuticals. If those materialize, that could see renewed demand for havens.
Meanwhile, gold has also been pressured by higher yields on US Treasuries, as investors pare bets on Federal Reserve interest-rate cuts by year-end. Higher borrowing costs tend to pose a headwind for non-yielding bullion.
The precious metal has rallied by about a quarter this year, setting a record in April, as Trump’s efforts to overhaul trade policies stoked uncertainty, driving investors to seek safety in gold. The advance has been supported by central-bank accumulation, with China announcing an eighth straight month of purchases earlier this week.
Spot gold was down 0.3% to $3,292.50 an ounce as of 8:06 a.m. in London. The Bloomberg Dollar Spot Index was little changed, after gaining as much as 0.2% earlier in the session. Silver, platinum and palladium declined.
