Gold prices flat as trade optimism, firm dollar curb safe-haven appeal

SINGAPORE: Gold prices were little changed on Tuesday, trading close to a three-week low, as easing concerns over a global trade war and a firmer US dollar reduced the metal’s safe-haven appeal.

As of 0401 GMT, spot gold was steady at $3,311.33 per ounce, after touching its lowest level since July 9 during the previous session. US gold futures were flat at $3,310.80.

“Gold prices around $3,300 are still drawing interest from buyers. However, short-term pressures from trade agreements and a stronger dollar are weighing on the market. Still, there’s potential for gains in the longer term,” said Tim Waterer, Chief Market Analyst at KCM Trade.

High-level talks between US and Chinese economic officials took place in Stockholm on Monday, lasting more than five hours. The discussions aimed to resolve long-standing trade issues and possibly extend a truce between the two economic powers by three months.

Meanwhile, the US reached a trade framework with the European Union on Sunday, imposing a 15 per cent tariff on most EU imports, half the previously threatened rate. The agreement helped avoid a broader trade conflict between the two allies, which together account for nearly a third of global trade.

The US dollar index hovered near a one-week high, making gold more expensive for investors using other currencies and limiting demand.

Market participants are now awaiting key US economic data due this week, including inflation and employment figures. Focus is also on the US Federal Reserve’s two-day policy meeting, which begins later on Tuesday. Most analysts expect interest rates to remain unchanged.

Waterer noted that weaker US economic data or a shift towards a more dovish tone from the Fed, possibly influenced by recent criticism from President Donald Trump—could provide support for gold.

Among other precious metals, spot silver fell 0.2 per cent to $38.09 per ounce. Platinum rose 0.6 per cent to $1,397.80, while palladium dropped 1.9 per cent to $1,223.02.

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