Gold prices steady after losses as U.S.-EU trade deal eases safe‑haven demand

Investing.com-- Gold prices steadied Monday following three consecutive days of declines, as a new trade deal between the United States and the European Union lifted risk appetite and curbed demand for the safe‑haven asset.

Traders also exercised caution ahead of the Federal Reserve interest rate decision due this week.

At 04:50 ET (08:50 GMT), spot gold edged down 0.1% to $3,334.05 an ounce and gold futures also dropped 0.1% to $3,390.05/oz.

Gold saw two consecutive weekly declines on Friday after a key U.S.-Japan trade eased global trade tensions.

US-EU deal sparks trade optimism

The U.S.–EU agreement announced Sunday imposed a 15% tariff on most European goods entering the U.S., half of the previously threatened rate, helping avert a full‑scale trade conflict and boosting market sentiment.

Meanwhile, top U.S. and Chinese officials were set to meet in Stockholm on Monday to discuss extending their tariff truce by three months. A South China Morning Post report stated that both sides have no plan to impose new duties ahead of the August 12 deadline.

This optimism weighed on gold demand even as the dollar remained subdued.

Analysts noted that progress toward a trade truce lowered uncertainty, drawing funds into equities and reducing bullion’s attraction.

Fed meeting looms

Attention now turns to this week’s Federal Reserve’s two‑day meeting, which ends on Wednesday, which is prompting a degree of caution.

The central bank is widely expected to maintain its benchmark rate in the 4.25% to 4.50% range. Investors will be watching for any shifts in tone about the timing of potential rate cuts.

"The market is anticipating fewer than two rate cuts by the Fed this year, with the first cut expected in October," said analysts at ING, in a note.

Markets also await key U.S. economic data releases later in the week, including July jobs figures and PCE price index data.

Metal markets subdued; platinum jumps

Silver Futures slipped 0.2% lower to $38.275 per ounce, while Platinum Futures jumped 1% to $1,436.70/oz.

Meanwhile, benchmark Copper Futures on the London Metal Exchange rose 0.3% $9,820.40 a ton, while U.S. Copper Futures edged 0.1% lower to $5.7800 a pound.

Ayushman Ojha contributed to this article