Gold eases as US–EU trade deal tempers haven demand

On Monday, gold prices held steady after slipping last week, as the newly signed US–EU trade deal reduced market uncertainty and dampened demand for traditional safe-haven assets like bullion. According to Bloomberg, spot gold was down 0.1 per cent at $3,332.67 an ounce by early Asian trading hours, after logging a 0.4 per cent weekly loss. Investors are recalibrating their positions following the transatlantic tariff agreement, which imposes 15 per cent levies on most EU exports, including cars and pharmaceuticals.

The gold market has soared this year, up more than 25 per cent so far, which was majorly driven by geopolitical tensions in Ukraine and the West Asia, and fears of a global trade breakdown during Donald Trump’s second term as US President. But the breakthrough deal with Europe, and expectations of a US–China tariff truce extension, are now easing some of that anxiety. “While the US–EU pact avoids an immediate escalation, questions remain about implementation, especially on sensitive sectors like pharma and metals,” analysts noted, according to Bloomberg.

Focus shifts to Fed and China talks

The South China Morning Post reported that US–China negotiators may extend their tariff pause by another three months, with fresh talks kicking off in Stockholm on Monday. That adds to broader market optimism and shifts focus away from defensive plays like gold.

At the same time, investors are bracing for a pivotal week of economic data and Federal Reserve commentary, which could signal the direction of interest rates. While the Fed is widely expected to hold rates steady, traders will be watching for any dovish tilt, as lower rates tend to boost non-yielding assets like gold.

Market positioning still bullish

Despite recent softness, sentiment around gold remains resilient. The latest data from the Commodity Futures Trading Commission (CFTC) shows that money managers have raised their bullish bets on gold to the highest in 16 weeks. Meanwhile, silver was little changed, while platinum and palladium posted modest gains. The Bloomberg Dollar Spot Index also dipped 0.1 per cent, offering slight support to commodities priced in dollars.

Gold had spiked to an all-time high above $3,500 an ounce in April, amid peak fears over escalating conflicts and protectionist trade policies. While those risks have cooled slightly, the yellow metal remains a key barometer of global uncertainty — and markets aren’t letting their guard down just yet.

(With inputs from the agencies)