Gold flat as easing trade tensions offset boost from soft US dollar
Markets widely expect the Fed to leave interest rates unchanged next week
[BENGALURU] Gold prices held steady on Thursday (Jul 24) after a sharp drop in the previous session, as easing trade tensions dented demand for safe-haven assets, overshadowing support from a weaker US dollar.
Spot gold was flat at US$3,388.49 per ounce, as at 0029 GMT, after dropping 1.3 per cent in the previous session. US gold futures were little changed at US$3,495.90.
The US dollar index fell to a more than two-week low against its rivals, making greenback-priced gold less expensive for other currency holders.
Signalling progress on tariffs, US President Donald Trump struck a trade deal with Japan that lowers tariffs on auto imports and spares Tokyo from punishing new levies on other goods in exchange for a US$550 billion package of US-bound investment and loans.
The European Union and the United States are nearing an agreement on a similar trade deal that would impose 15 per cent tariffs on European imports, while waiving duties on some items, according to officials from the European Commission.
Risk sentiment in the wider financial markets rose on the back of progress in trade talks and hopes that more deals could be in the offering.
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Data showed US existing home sales fell more than expected in June, suggesting the housing market slump could be deepening as higher mortgage rates and economic uncertainty keep potential buyers on the sidelines.
Focus now shifts to Thursday’s weekly jobless claims numbers and S&P Global’s flash PMI data to gauge economic health ahead of the US Federal Reserve monetary policy decision next week.
Markets widely expect the Fed to leave interest rates unchanged next week. Odds for a September reduction stand at about 63 per cent, according to the CME FedWatch tool.
Spot silver was flat at US$39.28 per ounce, platinum fell 0.1 per cent to US$1,410.47 and palladium slipped 0.3 per cent to US$1,273.98. REUTERS
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