Online Reporter
Gold steadied after the US and European Union announced a tariff agreement, staving off some concern about a potentially painful trade war between the economies.
Bullion traded below US$3 340 an ounce, following a 0,4 percent weekly loss, as investors weighed the outlook for the global economy in the wake of the deal, which will see the EU face 15 percent levies on most exports, including automobiles. Still, there are lingering questions about the scope of the pact, including details over metals, signalling potential challenges when it comes to implementation.
With several countries still racing to secure agreements with the US ahead of an August 1 deadline, investors continue to seek clarity on progress with China in particular. The South China Morning Post reported that the two sides are expected to extend their tariff truce by another three months, citing unnamed sources, ahead of trade talks due in Stockholm from Monday.
Gold is up more than a quarter this year, with uncertainty around US President Donald Trump’s aggressive attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, driving demand for havens. After bullion spiked to an all-time high above US$3 500 an ounce in April, the latest report from the Commodity Futures Trading Commission showed money managers have boosted bullish wagers to the highest in 16 weeks.
Investors will also be watching a pivotal week of data that’s likely to influence the tone for the rest of the year in markets and the economy. While the Federal Reserve is expected to keep interest rates unchanged, traders will pore over its commentary for clues about its monetary path. Lower borrowing costs tend to benefit gold, as it doesn’t pay interest. Spot gold was up 0,1 percent at US$3 339.30 an ounce at 2:25 p.m. in Singapore. The Bloomberg Dollar Spot Index was up 0,2 percent. Silver edged higher following a build in exchange-traded fund holdings, while platinum and palladium rallied. — Bloomberg
Peter Tanyanyiwa