Gold prices witnessed a decline on Monday after U.S. President Donald Trump indicated progress on multiple trade agreements and announced extended tariff reprieves for several countries, which reduced demand for the safe-haven metal.
In Dubai, gold rates decreased, with 24-carat gold dropping AED0.50 to AED402.25, while 22-carat gold fell 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 0.8 percent to $3,306.85 per ounce, as of 04:30 GMT (currently trading above $3,311). U.S. gold futures were also down 0.8 percent at $3,315.70 (currently trading above $3,320). President Trump stated on Sunday that the U.S. is nearing the finalization of several trade agreements in the coming days and will notify other countries of increased tariff rates by July 9. The higher rates are set to take effect on August 1.
Inflation concerns and rate cuts
In April, Trump announced a 10 percent base tariff on most countries, with additional duties reaching up to 50 percent. He later postponed the effective date for all but 10 percent of those tariffs until July 9, granting 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-driven inflation have resulted in expectations for slower rate cuts from the Federal Reserve. Rate futures indicate that traders no longer anticipate a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by year-end.
Tax and spending cuts
Last week, Trump signed into law a significant package of tax and spending cuts at the White House, which, according to nonpartisan analysis, will increase the country’s $36.2 trillion debt by more than $3 trillion.
Spot silver decreased 1.1 percent to $36.52 per ounce, platinum fell 2 percent to $1,363.39, and palladium dropped 2 percent to $1,112.53.
Gold prices rose on Friday after significant losses in the previous session, positioning them for a weekly gain amid concerns regarding the U.S. fiscal deficit and Washington’s impending tariff decision. In Dubai, gold rates increased, with 24-carat gold climbing AED1 to AED402.75, while 22-carat gold gained AED1 to AED372.75. Additionally, 21-carat gold rose AED1 to AED357.50, and 18-carat gold was up AED1 to AED306.25.
Spot gold increased by 0.5 percent to $3,341.34 an ounce, while August gold futures climbed 0.2 percent to $3,349.52 per ounce by 00:10 ET (04:10 GMT). The bullion had declined nearly 1 percent on Thursday after a robust U.S. jobs report diminished the likelihood of a Federal Reserve rate cut this month. Nevertheless, it remains on track for a weekly increase of 1.8 percent, following two consecutive weeks of declines.
