Gold Prices Dip Amid Strengthening US Dollar and Trade Optimism
Spot gold sees a decline as the US dollar index recovers and trade negotiations between the US and EU show promise.
Bengaluru: Gold prices retreated on Friday, influenced by the rebound of the US dollar and growing optimism regarding progress in trade discussions between the United States and the European Union.
Spot gold experienced a 0.5% decrease to $3,350.08 per ounce at approximately 11:20 a.m. Saudi time.
US gold futures also dipped 0.6% to $3,351.70.The strengthening of the US dollar index, rebounding from a two-week low, increased the cost of bullion for international buyers.
Additionally, benchmark 10-year US Treasury yields rose.
According to Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, the resurgence in risk appetite stemming from hopes of tariff negotiations and encouraging jobless claims data suggests that the US Federal Reserve is less likely to cut interest rates, resulting in downward pressure on gold prices.However, uncertainty persists, with $3,300 serving as a strong support level.
Evangelista believes that if new volatility emerges, gold prices may rise again.The European Commission announced on Thursday that an agreement on trade with the US appears achievable, despite EU members approving counter-tariffs on approximately $109 billion worth of US goods in case negotiations fail.
Data released shows a decline in new applications for jobless benefits to a three-month low last week, indicating stable labor market conditions.Prior to the next rate-setting meeting, where interest rates are expected to remain unchanged, President Donald Trump urged Federal Reserve Chair Jerome Powell to reduce interest rates during a tense visit to the US central bank on Thursday.
Markets currently anticipate a potential rate cut in September.Gold is historically more valuable during periods of uncertainty and low-interest-rate environments.
In other metals news, spot silver dropped 0.5% to $38.90 per ounce but is still poised for a weekly gain of about 1.9%.
Platinum fell by 0.6% to $1,400.02, while palladium decreased by 0.7% to $1,219.20.
Spot gold experienced a 0.5% decrease to $3,350.08 per ounce at approximately 11:20 a.m. Saudi time.
US gold futures also dipped 0.6% to $3,351.70.The strengthening of the US dollar index, rebounding from a two-week low, increased the cost of bullion for international buyers.
Additionally, benchmark 10-year US Treasury yields rose.
According to Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, the resurgence in risk appetite stemming from hopes of tariff negotiations and encouraging jobless claims data suggests that the US Federal Reserve is less likely to cut interest rates, resulting in downward pressure on gold prices.However, uncertainty persists, with $3,300 serving as a strong support level.
Evangelista believes that if new volatility emerges, gold prices may rise again.The European Commission announced on Thursday that an agreement on trade with the US appears achievable, despite EU members approving counter-tariffs on approximately $109 billion worth of US goods in case negotiations fail.
Data released shows a decline in new applications for jobless benefits to a three-month low last week, indicating stable labor market conditions.Prior to the next rate-setting meeting, where interest rates are expected to remain unchanged, President Donald Trump urged Federal Reserve Chair Jerome Powell to reduce interest rates during a tense visit to the US central bank on Thursday.
Markets currently anticipate a potential rate cut in September.Gold is historically more valuable during periods of uncertainty and low-interest-rate environments.
In other metals news, spot silver dropped 0.5% to $38.90 per ounce but is still poised for a weekly gain of about 1.9%.
Platinum fell by 0.6% to $1,400.02, while palladium decreased by 0.7% to $1,219.20.
