Weaker dollar fails to lift gold as global trade talks ease fears

SINGAPORE: Gold prices remained steady on Thursday, July 24, following a sharp decline in the previous session, as easing global trade tensions reduced investor demand for safe-haven assets, despite support from a weaker US dollar.

As of 0029 GMT, spot gold was flat at US$3,388.49 per ounce, after shedding 1.3 per cent in the previous session. Meanwhile, US gold futures hovered near US$3,495.90, showing little change. 

The US dollar index dipped to its lowest level in over two weeks against major currencies, making gold more attractive for buyers holding other currencies. However, this was outweighed by growing investor confidence driven by developments in trade negotiations. 

Market sentiment was buoyed after US President Donald Trump announced a trade agreement with Japan. The deal includes reduced tariffs on auto imports and exempts Japan from new duties on other goods, in return for a US$550 billion investment and loan package headed to the US. 

Separately, European Commission officials indicated that the European Union and the US are close to finalising a similar deal. The proposed agreement would introduce 15 per cent tariffs on certain European imports while eliminating duties on selected goods. 

Improved trade outlooks have encouraged risk-taking in broader markets, tempering the usual appeal of gold as a safe-haven.

On the economic front, US housing data showed existing home sales fell more than expected in June. The figures point to growing weakness in the housing sector, amid high mortgage rates and continued economic uncertainty. 

Investors are now eyeing upcoming data, including weekly jobless claims and S&P Global’s flash PMI, for further clues on the health of the US economy.  

These indicators come ahead of the US Federal Reserve’s policy meeting next week, where the central bank is expected to hold interest rates steady. However, the probability of a rate cut in September stands at roughly 63 per cent, according to the CME FedWatch tool. 

In other precious metals, spot silver was unchanged at US$39.28 per ounce. Platinum edged down 0.1 per cent to US$1,410.47, while palladium dropped 0.3 per cent to US$1,273.98. 

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