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Gold dips to two-week low as US-EU trade deal eases market anxiety

Gold dips to two-week low as US-EU trade deal eases market anxiety

Web Desk
Jul 28, 2025

SINGAPORE: Gold prices slipped to their lowest in nearly two weeks on Monday, as a new trade agreement between the United States and the European Union reduced demand for safe-haven assets.

By 0020 GMT, spot gold had edged down 0.1 per cent to US$3,332.39 per ounce, after hitting its lowest level since July 17. US gold futures also dipped 0.1 per cent, trading at US$3,332.50 per ounce.

The decline followed Sunday’s announcement of a framework deal between Washington and Brussels, which imposed a 15 per cent import tariff on most EU goods, half of what had previously been threatened. The move helped defuse tensions between the two allies, who together account for nearly a third of global trade.

The pact mirrors elements of a similar agreement earlier reached between the US and Japan. However, like that deal, it leaves some issues unresolved — notably, tariff rules on alcoholic beverages, a sensitive subject on both sides of the Atlantic.

Markets responded positively to the news. Investor confidence improved, with European currencies and US stock index futures posting modest gains.

Meanwhile, attention is shifting to Stockholm, where senior US and Chinese officials are set to meet on Monday in a fresh bid to address long-standing economic disagreements. The talks aim to uphold the current truce and prevent further escalation in the ongoing trade dispute between the world’s two largest economies.

The US dollar index eased 0.1 per cent, slightly improving the appeal of dollar-priced gold for buyers using other currencies.

Traders are also eyeing the upcoming Federal Reserve policy meeting, set to conclude on Wednesday. The Fed is expected to keep interest rates steady at between 4.25 and 4.50 per cent. Chair Jerome Powell has signalled that any decision on rate changes will depend on incoming economic data.

Adding to market speculation, US President Donald Trump said on Friday that his meeting with Powell went well, hinting that the Fed might consider lowering rates in the near future.

In other precious metals, spot silver rose 0.1 per cent to US$38.17 per ounce. Platinum gained 0.9 per cent to US$1,413.50, while palladium was up 0.5 per cent at US$1,225.25.