Gold prices fluctuated in negative territory, hovering around $3,330 on Tuesday, as a result of a stronger U.S. Dollar (USD). The precious metal experienced a slight decline due to easing trade tensions following U.S. President Donald Trump’s announcement regarding an extension to the upcoming tariff deadline, along with his indication of openness to further negotiations.
In Dubai, gold rates saw a decrease, with 24-carat gold falling AED0.50 to AED399, while 22-carat gold dropped to AED369.5. Additionally, 21-carat gold declined AED0.50 to AED357.00, and 18-carat gold was down AED0.25 to AED306.00.
Spot gold decreased by 0.02 percent to $3,332.45 per ounce. Meanwhile, U.S. gold futures also fell by 0.05 percent, reaching $3,341.37. President Trump stated on Sunday that the U.S. is close to finalizing multiple trade agreements in the coming days and will inform other countries of increased tariff rates by July 9. The elevated rates are scheduled to take effect on August 1.
Easing market anxieties
Market anxieties eased after Trump hinted at the possibility of an additional trade deal and delays related to the tariff deadline. He further noted that the August 1 deadline was “not 100 percent firm,” signaling his readiness to continue adjusting the rates. The optimism surrounding Trump’s tariff policies supports the Greenback, impacting the prices of USD-denominated commodities, as a stronger USD makes gold more expensive for foreign purchasers.
Gold traders will be vigilant about forthcoming announcements from the White House regarding trade negotiations. Any indications of renewed trade tensions or fears of a global trade war could spur safe-haven demand, positively affecting gold prices.
Moreover, increased buying of gold by major central banks could contribute to the yellow metal’s upward movement. A recent report from the World Gold Council (WGC) indicated that global central banks ramped up their gold purchases in May compared to previous months. Official data from the People’s Bank of China (PBOC) revealed that China’s central bank has added gold to its reserves for the eighth consecutive month in June.
Gold prices fell on Monday after U.S. President Donald Trump suggested progress on various trade agreements and announced extended tariff reprieves for several countries, which diminished the safe-haven metal’s demand. In Dubai, gold rates decreased, with 24-carat gold declining AED0.50 to AED402.25, and 22-carat gold dropping to AED372.25. Furthermore, 21-carat gold slipped AED0.50 to AED357.00, and 18-carat gold was down AED0.25 to AED306.00.
Spot gold fell by 0.8 percent to $3,306.85 per ounce as of 04:30 GMT, while U.S. gold futures saw a similar decline of 0.8 percent, reaching $3,315.70. President Trump reiterated on Sunday that the U.S. is nearing completion of several trade agreements and will notify other nations of increased tariff rates by July 9.
Rising national debt concerns
Last week, Trump enacted a substantial package of tax and spending cuts at the White House, which, according to nonpartisan analysis, will elevate the nation’s $36.2 trillion debt by over $3 trillion. Spot silver decreased by 1.1 percent to $36.52 per ounce, while platinum fell by 2 percent to $1,363.39, and palladium dropped by 2 percent to $1,112.53.
Gold prices rebounded on Friday following significant losses in the previous session, positioning themselves for a weekly gain amid concerns regarding the U.S. fiscal deficit and impending tariff decisions from Washington. In Dubai, gold rates increased, with 24-carat gold rising AED1 to AED402.75, while 22-carat gold climbed AED1 to AED372.75. Additionally, 21-carat gold surged AED1 to AED357.50, and 18-carat gold was up AED1 to AED306.25.
Spot gold rose by 0.5 percent to $3,341.34 per ounce, while August gold futures increased by 0.2 percent to $3,349.52 per ounce by 00:10 ET (04:10 GMT). The bullion had seen a nearly 1 percent decline on Thursday after a strong U.S. jobs report diminished the likelihood of a Federal Reserve rate cut this month. Nonetheless, it remains on track for a weekly increase of 1.8 percent, following two consecutive weeks of declines.
Postponement of tariff implementation
In April, Trump announced a 10 percent base tariff on most countries, with additional duties reaching as high as 50 percent. He subsequently postponed the effective date for all but 10 percent of those tariffs until July 9, providing a three-week reprieve to most affected nations.
“This short-term reprieve (by the U.S.) is causing this intraday weakness in the gold price right now,” Reuters reported, quoting OANDA senior market analyst Kelvin Wong. “What I foresee will be another round of so-called trophy price movement at around the $3,320 level, then we have the top side coming in at $3,360, short-term resistance.”
Concerns over tariff-induced inflation have led to expectations for slower rate cuts from the Federal Reserve. Rate futures indicate that traders no longer foresee a Fed rate cut this month and are pricing in only two quarter-point reductions by year-end.
