Gold prices dip as trade optimism weakens safe-haven demand 

SINGAPORE: Gold prices slipped slightly on Friday, as renewed hopes around a potential trade deal between the United States and the European Union reduced investors’ appetite for safe-haven assets. However, a weaker US dollar helped limit the metal’s losses.

By 0459 GMT, spot gold was down 0.2 per cent at $3,360.68 per ounce, while US gold futures dropped 0.3 per cent to $3,363.

Kelvin Wong, senior market analyst at OANDA, said short-term bullish investors were cashing in profits amid signs of improving global trade ties. “There’s growing optimism about a trade deal, which is prompting some profit-taking,” he noted. “That said, the dollar remains under pressure, and with expectations of US rate cuts still alive, gold is finding support near the $3,360 level.” 

Diplomats in Brussels have indicated progress towards a trade agreement between the US and EU, which could see both sides adopt a framework similar to Washington’s recent deal with Japan. That agreement included a 15 per cent tariff structure on certain goods. 

The easing of global trade tensions also buoyed investor sentiment on Wall Street. The S&P 500 and Nasdaq closed at record highs overnight, signalling increased risk appetite. 

Meanwhile, the US dollar index (.DXY) was on track for its weakest weekly performance in a month, helping make dollar-priced gold more affordable for buyers using other currencies. 

In economic data, US jobless claims unexpectedly fell last week, reflecting a relatively steady labour market despite broader concerns about slow hiring trends. 

While the Federal Reserve is widely expected to keep interest rates unchanged at its upcoming July 29–30 meeting, markets are still factoring in the possibility of a rate cut in September, which tends to support gold prices. 

Among other precious metals, spot silver slipped 0.3 per cent to $38.96 per ounce, though it remained on course for a weekly gain of around 2 per cent. Platinum declined 0.8 per cent to $1,396.43, and palladium was down 0.9 per cent at $1,217.02. 

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