Gold prices drop as Trump signals trade deals, extends tariff reprieve
[BENGALURU] Gold prices dropped on Monday (Jul 7) after US President Donald Trump signalled progress on multiple trade agreements and announced extended tariff reprieve for several countries, dampening demand for the safe-haven metal.
Spot gold was down 0.3 per cent at US$3,323.71 per ounce, as at 0028 GMT. US gold futures also fell 0.3 per cent to US$3,332.20.
The US is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by Jul 9, Trump said on Sunday, with the higher rates scheduled to take effect on Aug 1.
Trump announced in April a 10 per cent base tariff on most countries, with additional duties of up to 50 per cent. He later postponed the effective date for all but 10 per cent of those tariffs from Jul 9. The new date grants a three-week reprieve to most affected nations.
Concerns over tariff-driven inflation have jostled expectations for Federal Reserve policy. Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by the year-end.
Last week, Trump signed into law a massive package of tax and spending cuts at the White House, which as per nonpartisan analysis, will add more than US$3 trillion to the nation’s US$36.2 trillion debt.
The US dollar index weakened 0.3 per cent on Monday, after registering its second consecutive weekly loss last week. A lower US dollar makes greenback-priced bullion affordable for overseas buyers.
Elsewhere, the first session of indirect Hamas-Israel ceasefire talks in Qatar ended inconclusively, two Palestinian sources familiar with the matter said early on Monday, adding that the Israeli delegation did not have a sufficient mandate to reach an agreement with Hamas.
Spot silver was steady at US$36.94 per ounce, platinum shed 0.3 per cent to US$1,388.06 and palladium remain unchanged at US$1,134.38. REUTERS
Share with us your feedback on BT's products and services
