Bengaluru — Gold prices dropped on Monday after US President Donald Trump signalled progress on multiple trade agreements and announced extended tariff reprieves for several countries, dampening demand for the safe-haven metal.
Spot gold fell 0.8% to $3,306.85/oz by 4.30am GMT. US gold futures were down 0.8% at $3,315.70.
The US was close to finalising several trade agreements in the coming days and would notify other countries of higher tariff rates by July 9, Trump said on Sunday, with the higher rates scheduled to take effect on August 1.
Trump announced in April a 10% base tariff on most countries, with additional duties of up to 50%. He later postponed the effective date for all but 10% of those tariffs until July 9. The new date grants a three-week reprieve to most affected nations.
“This short-term reprieve [by the US] is causing this intraday weakness in the gold price right now,” Oanda senior market analyst Kelvin Wong said.
“What I foresee will be another round of so-called trophy price movement at around the $3,320 level, then we have the top side coming in at $3,360, short-term resistance.”
Concerns of tariff-driven inflation have led to expectations of slower rate cuts from the Federal Reserve. Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by the year-end.
Last week, Trump signed into law a huge package of tax and spending cuts at the White House, which as per nonpartisan analysis will add more than $3-trillion to the country’s $36.2-trillion debt.
Spot silver fell 1.1% to $36.52/oz, platinum shed 2% to $1,363.39, and palladium lost 2% to $1,112.53.
Reuters
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