Gold gives up five-week high on profit-taking

Gold prices fell in the European market on Tuesday for the first time in the last three days, giving up a five-week high recorded earlier in Asian trading, due to active correction and profit-taking operations.

Losses are being curbed by the continued decline in US dollar levels in the foreign exchange market, as investors focus on the results of global trade talks ahead of the deadline set by US President Donald Trump on August 1.

The Price

• Gold prices today: Gold prices fell by 0.4% to ($3,383.36), from the opening level of trading at ($3,396.93), and recorded the highest level at ($3,402.78), the highest since June 16.

• Upon settlement on Monday, gold prices rose by 1.4%, in the second consecutive daily gain, thanks to the decline in US yields and the dollar.

US Dollar

The dollar index fell on Tuesday by 0.1%, continuing its losses for the third consecutive session, nearing the lowest level in two weeks at 97.70 points, reflecting the continued decline in US currency levels against a basket of major and minor currencies.

Investors are anticipating any progress in global trade talks ahead of the August 1 deadline for countries to strike deals with the US or face hefty tariffs.

Trade Developments

European Union diplomats said the bloc is considering broader retaliatory measures against the US as the likelihood of reaching a trade agreement with Washington diminishes.

Donald Trump earlier threatened to impose a 30% tariff on European imports if no agreement is reached before the August 1 deadline.

US Treasury Secretary "Scott Besant" said: imposing tariffs on August 1 “will increase the pressure” on trade partners to finalize deals.

US Interest Rates

• According to the CME Group’s FedWatch tool: pricing of the probability of a 25 basis point rate cut in the July meeting is currently stable at 3%, and pricing of keeping rates unchanged is at 97%.

• Pricing of the probability of a 25 basis point rate cut in the September meeting is currently stable at 58%, and pricing of keeping rates unchanged is at 42%.

• Focus is on the US Federal Reserve’s monetary policy meeting scheduled for next week, which is expected to provide more clues about the US interest rate path this year.

Gold Outlook

• Senior analyst at Reliance Securities “Jigar Trivedi” said: Gold prices dropped slightly amid profit-taking, but remained close to the highest level in five weeks due to ongoing uncertainty ahead of the tariff deadline on August 1.

• Trivedi added: Gold is likely to remain optimistic, with strong resistance seen near $3,420. On the other hand, $3,350 represents a support level.

SPDR Fund

Holdings of gold at SPDR Gold Trust, the world’s largest gold-backed ETF, increased yesterday by about 3.43 metric tons, bringing the total up to 947.06 metric tons, rebounding from the total of 943.63 metric tons which was the lowest since June 16.