Gold Prices Decline Due to Changes in Trade Tensions and Economic Expectations
Gold prices fell on Tuesday as easing trade tensions between the U.S. and its trading partners reduced the metal’s appeal as a safe haven. Meanwhile, investors awaited U.S. economic data to assess the Federal Reserve’s policy, reports Reuters.
This is reported by AgroReview
Changes in the Gold Market and Trade Outlook
The spot price of gold decreased by 0.8%, reaching $3314.65 per ounce as of 06:19 GMT (09:19 Kyiv time). U.S. gold futures dropped 0.7% to $3324.20. “The risk environment has clearly improved lately, as market participants are inspired by optimism that the worst of the trade disputes may be behind us, amid encouraging rhetoric surrounding trade agreements”, said IG Market strategist Yeap Jun Rong.
U.S. Treasury Secretary Scott Bessent noted on Monday that several leading trading partners made “very good” proposals to avoid U.S. tariffs, with India likely to be one of the first to reach an agreement. It was also noted that recent steps by China to exempt some U.S. goods from tariffs indicate a willingness to reduce trade tensions, Bessent added.
Impact of Policy on Price Trends and Forecasts
The administration of U.S. President Donald Trump plans to reduce the impact of auto tariffs by easing some tariffs on foreign auto parts. However, economists surveyed by Reuters assign a high probability to a global economic recession this year, emphasizing that Trump’s tariffs have negatively affected the business climate. Bullion, which traditionally serves as a hedge against political and financial instability, reached a historic high of $3500.05 per ounce last week due to rising uncertainty.
Investors will now closely monitor U.S. economic data this week. “Long-term structural tailwinds for gold prices are likely to maintain a broader upward trend, supported by opportunities for reserve diversification among central banks in emerging markets”, Rong noted.
The prices of other precious metals also showed declines: silver fell by 0.6% to $32.98 per ounce, platinum dropped by 0.2% to $984.65, and palladium lost 0.5%, decreasing to $944.34 per ounce.