Gold prices saw a decline on Tuesday as easing trade tensions between the U.S. and its trading partners diminished the metal’s allure as a safe haven. Investors are now keenly awaiting U.S. economic data, which will provide insights into the Federal Reserve‘s policy trajectory.
In Dubai, gold rates experienced a rise, with 24-carat gold increasing by AED5.00 to reach AED400.75. Likewise, 22-carat gold rose by AED5.25, bringing its price to AED371.25. Additionally, 21-carat gold saw an increase of AED25.25, reaching AED356.00, while 18-carat gold went up by AED4.25, now priced at AED305.00.
As of 02:11 GMT, spot gold declined by 0.4 percent to $3,329.12 an ounce, and U.S. gold futures dropped 0.2 percent to $3,342.40. Currently, spot gold stands at $3,314.97.
Improved risk environment
“The risk environment has clearly improved recently, with market participants buoyed by optimism that the worst of the trade tensions may be behind us amid encouraging rhetoric around trade deals,” reported Reuters, citing IG market strategist Yeap Jun Rong.
U.S. Treasury Secretary Scott Bessent indicated on Monday that several key trading partners had presented “very good” proposals aimed at circumventing U.S. tariffs, with India likely to be among the first to finalize an agreement. Additionally, Bessent noted that China’s recent decision to exempt certain U.S. goods from its retaliatory tariffs demonstrated a willingness to ease trade tensions.
In a related move, the Trump administration plans to mitigate the effects of automotive tariffs by reducing some duties on foreign parts used in domestically manufactured vehicles.
Economic risks and recession concerns
However, economists remain cautious, with a significant number expressing concerns that the global economy may slip into recession this year. Many believe that Trump’s tariffs have negatively impacted business sentiment.
Gold, traditionally regarded as a hedge against political and financial uncertainty, surged to an unprecedented high of $3,500.05 per ounce last week, fueled by prevailing uncertainties.
Upcoming economic data
Investors will closely monitor a series of economic indicators this week, including the U.S. job openings report later today, Personal Consumption Expenditures on Wednesday, and the non-farm payrolls report on Friday.
“Longer-term structural tailwinds for gold prices are likely to keep the broader upward trend intact, supported by room for ongoing reserve diversification among emerging market central banks,” stated Rong.
Other precious metals
In the precious metals market, spot silver increased by 0.1 percent to $33.21 an ounce, platinum remained stable at $986.00, and palladium saw a slight decline of 0.1% to $948.06.
