Gold falls as firmer dollar adds to pressure of softened US trade stance
GOLD prices declined more than 1% on Tuesday as the dollar's reversal to trade higher added to the pressure on the safe-haven asset following U.S. President Donald Trump's less aggressive trade stance towards the European Union.
Spot gold was down 1.4% at $3,297.49 an ounce as of 1022 GMT. U.S. gold futures fell 2.1% to $3,296.50.
Prices had softened on Monday as well after Trump, on Sunday, retreated from his threat to impose new tariffs on the European Union next month, instead reinstating a July 9 deadline for trade negotiations.
'Gold trades lower for a second day with technical selling along a descending trendline ... from the April record high, being supported by reduced haven demand amid rising stocks after Trump softened his aggressive trade stance with the EU,' said Ole Hansen, head of commodity strategy at Saxo Bank.
The U.S. dollar index reversed earlier declines to trade 0.3% higher, making greenback-priced gold more expensive for overseas buyers.
Market participants also await speeches from several Federal Reserve policymakers this week and Friday's U.S. inflation (core PCE) data to gauge the central bank's rate cut trajectory. Lower rates increase non-yielding bullion's appeal.
'Gold traders will be watching incoming U.S. economic data for signs of a tariff-related slowdown and/or a pick up in inflation,' Hansen added.
Investors are currently anticipating 47 basis points worth of rate cuts by the end of this year, starting in October.
'The shorter term outlook is unchanged: gold is still consolidating. We expect prices to remain supported while the markets contend with continued uncertainty, but we believe that the high is in,' StoneX analyst Rhona O'Connell said in a note.
Elsewhere, spot silver slipped 0.9% to $33.06 per ounce, platinum fell 0.7% to $1,077.77 and palladium dropped 1% to $978.01.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
an hour ago
- New Straits Times
Ringgit expected to trade in cautious mode next week amid US tariff uncertainty
KUALA LUMPUR: The ringgit is likely to be traded cautiously against the US dollar next week amid ongoing uncertainties surrounding US tariff policy developments, said Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid. This follows renewed market uncertainty after a US federal appeals court granted the White House's request to temporarily pause a lower-court ruling that struck down President Donald Trump's tariffs on imports into the country. Earlier, the US Court of International Trade had ruled that the tariffs announced by Trump were illegal. However, the Trump administration challenged the ruling, which has briefly restored the tariffs while the appeal process runs its course. Besides that, he said attention will also turn to the upcoming US Federal Reserve's Federal Open Market Committee (FOMC) meeting scheduled for June 16-17. "Key US economic indicators, particularly labour market data and inflation figures, will be closely watched. "Important data releases such as nonfarm payrolls, the unemployment rate, and the Institute for Supply Management manufacturing index will serve as critical guidance for investors and traders," he told Bernama, adding that current data suggests a moderating growth outlook. Hence, Mohd Afzanizam said the FOMC is likely to maintain its interest rate stance, given that tariff-related policies could pose future inflationary risks. Given these developments, he opined that the USD/MYR is expected to remain within the RM4.22–RM4.24 range in the coming week. The ringgit ended the week lower against the US dollar, closing at 4.2530/2605 on Friday from 4.2285/2345 a week earlier. The local note traded lower against a basket of major currencies. The ringgit depreciated versus the euro to 4.8169/8254 at Friday's close from 4.7985/8053 at the end of last week. It also fell vis-à-vis the Japanese yen to 2.9531/9585 from 2.9502/9546 and inched down against the British pound to 5.7284/7385 from 5.7072/7153 a week earlier. However, the ringgit traded mostly higher against Asean currencies. The local note improved against the Philippine peso to 7.62/7.64 from 7.65/7.66 a week before, edged up against the Indonesian rupiah to 260.4/261.1 from 260.7/261.1 and strengthened versus the Thai baht to 12.9507/9790 from 12.9744/13.0012 last week. However, it weakened versus the Singapore dollar to 3.2938/3002 on Friday from 3.2891/2940 the previous week.
The Sun
2 hours ago
- The Sun
How Trump's trade war is upending the global economy
U.S. President Donald Trump's tariff decisions since he took office on January 20 have shocked financial markets and sent a wave of uncertainty through the global economy. Here is a timeline of the major developments: February 1 - Trump imposes 25% tariffs on Mexican and most Canadian imports and 10% on goods from China, demanding they curb the flow of fentanyl and illegal immigrants into the United States. February 3 - Trump suspends his threat of tariffs on Mexico and Canada, agreeing to a 30-day pause in return for concessions on border and crime enforcement. The U.S. does not reach such a deal with China. February 7 - Trump delays tariffs on de minimis, or low-cost, packages from China until the Commerce Department can confirm that procedures and systems are in place to process them and collect tariff revenue. February 10 - Trump raises tariffs on steel and aluminum to a flat 25% 'without exceptions or exemptions'. March 3 - Trump says 25% tariffs on goods from Mexico and Canada will take effect from March 4 and doubles fentanyl-related tariffs on all Chinese imports to 20%. March 5 - The president agrees to delay tariffs for one month on some vehicles built in Canada and Mexico after a call with the CEOs of General Motors and Ford and the chair of Stellantis. March 6 - Trump exempts goods from Canada and Mexico under a North American trade pact for a month from the 25% tariffs. March 26 - Trump unveils a 25% tariff on imported cars and light trucks. April 2 - Trump announces global tariffs with a baseline of 10% across all imports and significantly higher duties on some of the U.S.' biggest trading partners. April 9 - Trump pauses for 90 days most of his country-specific tariffs that kicked in less than 24 hours earlier following an upheaval in financial markets that erased trillions of dollars from bourses around the world. The 10% blanket duty on almost all U.S. imports stays in place. Trump says he will raise the tariff on Chinese imports to 125% from the 104% level that took effect a day earlier. This pushes the extra duties on Chinese goods to 145%, including the fentanyl-related tariffs imposed earlier. April 13 - The U.S. administration grants exclusions from steep tariffs on smartphones, computers and some other electronics imported largely from China. April 22 - The Trump administration launches national security probes under Section 232 of the Trade Act of 1962 into imports of both pharmaceuticals and semiconductors as part of a bid to impose tariffs on both sectors. May 4 - Trump imposes a 100% tariff on all movies produced outside the U.S. May 9 - Trump and British Prime Minister Keir Starmer announce a limited bilateral trade agreement that leaves in place 10% tariffs on British exports, modestly expands agricultural access for both countries and lowers prohibitive U.S. duties on British car exports. May 12 - The U.S. and China agree to temporarily slash reciprocal tariffs. Under the 90-day truce, the U.S. will cut the extra tariffs it imposed on Chinese imports to 30% from 145%, while China's duties on U.S. imports will be slashed to 10% from 125%. May 13 - The U.S. cuts the low value 'de minimis' tariff on China shipments, reducing duties for items valued at up to $800 to 54% from 120%. May 23 - Trump says he is recommending a straight 50% tariff on goods from the European Union starting on June 1. He also warned Apple it would face 25% tariff if phones it sold in the U.S. were manufactured outside of the country. May 25 - Trump backpedals on his threat to slap 50% tariffs on imports from the EU, agreeing to extend the deadline for talks between the U.S. and the block until July 9. May 28 - A U.S. trade court blocked Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority by imposing across-the-board duties on imports from U.S. trade partners. The Trump administration said it would appeal the ruling. May 29 - A federal appeals court temporarily reinstates the most sweeping of Trump's tariffs, saying it was pausing the lower court's ruling to consider the government's appeal, and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9. May 30 - At a rally in Pennsylvania, Trump says he plans to increase tariffs on imported steel and aluminum to 50% from 25%.
The Star
3 hours ago
- The Star
Asia's factory activity shrinks in May as US tariffs bite
A welder works on a K9 Howitzer at Hanwha Aerospace's manufacturing facility in Changwon, South Korea, on Thursday, April 18, 2024. - Bloomberg TOKYO: Asia's factory activity shrank in May as soft demand in China and the impact of U.S. tariffs took a heavy toll on companies, private surveys showed on Monday, highlighting the darkening outlook for the once fast-growing region. Trade-reliant Japan and South Korea continued to see manufacturing activity contract in May as U.S. President Donald Trump's automobile tariffs cloud the outlook for exports. Adding to the gloom, an official survey on Saturday showed China's manufacturing activity shrank in May for a second month in a sign of weakness in the world's second-largest economy. With many Asian economies making little progress in trade negotiations with the U.S., uncertainty will likely keep companies from boosting production or spending, analysts said. "It's hard to expect a pick-up in Asia's manufacturing activity any time soon with countries in the region slapped with quite high 'reciprocal' tariffs," said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute. "With domestic demand weak, China is flooding Asia with cheap exports, which is also putting deflationary pressure on the region's economies," he said. Japan's final au Jibun Bank Manufacturing Purchasing Managers' Index (PMI) stood at 49.4 in May, up from April but staying below the 50.0 line that indicates contraction for the 11th successive month, a private survey showed on Monday. The PMI for South Korea, Asia's fourth-largest economy, stood at 47.7 in May, also staying below the 50 mark for a fourth month due to frail demand and the hit from U.S. tariffs, a survey by S&P Global showed. Both Japan and South Korea saw their economies contract in the first quarter, as Trump's tariffs and uncertainty over U.S. trade policy weighed on exports and corporate activity. There is little sign conditions will improve. On Friday, Trump said China had violated a two-way deal to scale back tariffs, whereas China contended it had maintained communication on trade with the United States. Trump also announced a doubling of worldwide steel and aluminium tariffs to 50%, once again rattling international trade. Japan and the U.S. on Friday agreed to hold another round of trade talks ahead of the G7 summit in June, but Japan's top tariff negotiator said no deal would be reached without concessions on all U.S. tariffs, including on automobiles. Vietnam, Indonesia and Taiwan also saw factory activity contract in May, private surveys showed. - Reuters
