Gold closed at 3,300 USD per ounce on July 8, down 34 USD. During the session, it even dipped to 3,290 USD. Investor anticipation of further trade agreements between the US and its partners drove the decline.
On July 7, US President Donald Trump announced new retaliatory tariffs against 14 countries. Two leading Asian economies, Japan and South Korea, face a 25% tariff. However, the implementation date has been pushed back to August 1, giving these countries three more weeks to negotiate with the US. Following the announcement, several countries indicated their willingness to continue discussions with the US to mitigate the impact of import taxes.
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Global gold prices saw a significant decline on July 8. Chart: Kitco |
"Investor focus on trade intensified as the July 9 deadline approached, and the Trump administration increased pressure. However, optimism surrounding potential trade deals overshadowed safe-haven demand, leading to gold's decline," explained Peter Grant, commodities strategist at Zaner Metals.
A stronger dollar and rising US government bond yields further pressured the precious metal. The Dollar Index, which measures the greenback against six major currencies, rose 0.1% to 97.5 points. The 10-year US Treasury yield also reached a two-week high, making non-interest-bearing gold less attractive.
Markets now await the minutes from the latest Federal Reserve (Fed) meeting, due for release on April 9. Several Fed officials are also scheduled to speak this week, offering further insights into the economy and the Fed's policy stance.
"The risk of prolonged inflation from import tariffs is likely to push the Fed to further delay interest rate cuts until next year. This will exert additional pressure on gold," said Hamad Hussain, an economist at Capital Economics. Investors currently anticipate a total of 50 basis points (0.5%) in rate cuts this year, starting in October.
Other precious metals also declined. Silver fell 0.3% to close at 36.6 USD per ounce on July 8. Platinum lost 0.8% to 1,359 USD, while palladium remained relatively stable at 1,111 USD.
Ha Thu (according to Reuters)
