SINGAPORE: Gold prices fell on Monday after US President Donald Trump said the country was making progress on multiple trade deals and extended a tariff relief period for several nations. The move reduced demand for gold, which is typically seen as a safe-haven asset during times of uncertainty.
By 0232 GMT, spot gold was down 0.6 per cent at $3,314.21 per ounce, while US gold futures dropped 0.6 per cent to $3,322.
Trump said on Sunday that the US is close to finalising a series of trade agreements, and that countries will be formally notified of higher tariffs by July 9. Those increased tariffs are scheduled to take effect from August 1.
Back in April, Trump had announced a 10 per cent base tariff on most countries, with additional duties of up to 50 per cent. However, the implementation of 90 per cent of those tariffs was delayed until July 9, giving affected nations an extra three weeks.
“This short-term reprieve is behind the current weakness in gold prices,” said Kelvin Wong, senior market analyst at OANDA. He added that prices may move around the $3,320 mark, with short-term resistance seen at $3,360.
Expectations of inflation from the planned tariffs had previously supported bets on interest rate cuts. However, with the latest developments, traders are now predicting slower action from the Federal Reserve. Market futures no longer reflect expectations of a rate cut in July, and only two quarter-point reductions are priced in for the rest of the year.
Adding to economic concerns, Trump last week signed into law a major tax and spending package that is expected to increase the US national debt by over $3 trillion, pushing it past $36.2 trillion, according to nonpartisan estimates.
Among other precious metals, silver dropped 0.8 per cent to $36.81 per ounce. Platinum also fell 0.8 per cent to $1,380.55, while palladium slipped 1 per cent to $1,123.31.
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