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Gold retreats for third straight session
AI Summary
- Gold prices declined for the third consecutive day, dropping to $3,358.00 per ounce from a recent high of $3,438.94
- The US dollar continued to recover in foreign exchange markets, supported by renewed buying and ahead of the Federal Reserve policy meeting next week
- Market focus remains on the Fed meeting, with expectations for a 25-basis-point rate cut at the July meeting at 3% and a stable probability of a cut in September at 62%
Gold prices declined in European markets on Friday, marking a third consecutive daily loss and retreating further from a five-week high. The drop comes as profit-taking continues, alongside a slowdown in safe-haven demand amid easing global trade tensions.
Meanwhile, the US dollar continues to recover in foreign exchange markets, supported by renewed buying from lower levels and ahead of next week’s Federal Reserve policy meeting.
The Price
• Gold fell 0.35% to $3,358.00 per ounce, down from the session open at $3,368.62, after recording a high of $3,373.62.
• On Thursday, gold settled 0.55% lower, posting its second straight daily loss amid ongoing corrections from the recent five-week peak of $3,438.94.
Trade Developments
Following the major trade agreement between the US and Japan, some EU Commission officials confirmed that the EU and the US are nearing a similar deal. The proposed agreement includes a 15% tariff on European imports, with some goods exempt from US tariffs.
US Treasury Secretary Scott Besant stated that US and Chinese officials will meet in Stockholm next week to discuss extending the trade negotiation deadline to August 12.
US Dollar
The US Dollar Index rose 0.1% on Friday, extending gains for a second session as the greenback continues to recover from a two-week low, supported by renewed buying against a basket of major and minor currencies.
Markets largely brushed off President Donald Trump’s visit to the Federal Reserve on Thursday, during which he clashed with Fed Chair Jerome Powell over renovation costs for historic buildings at the Fed's headquarters and demanded rate cuts — familiar rhetoric for investors.
US Interest Rates
• According to CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut at the July Fed meeting remains steady at 3%, while expectations for no change stand at 97%.
• For the September meeting, the probability of a 25-basis-point cut is stable at 62%, with a 38% chance of rates being held steady.
• Market focus remains on next week’s Fed meeting, expected to offer clearer guidance on the interest rate trajectory for the remainder of the year.
Gold Outlook
Kelvin Wong, Market Analyst for Asia-Pacific at OANDA, noted: “We’re basically seeing some profit-taking from short-term bullish speculators, as optimism surrounding a trade deal is starting to surface in the market.”
SPDR Gold Trust
Holdings in the SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — rose by 2.29 metric tons yesterday, bringing the total to 957.09 metric tons, the highest since June 23.
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