Gold softened as the EU-US trade outlook improves

Gold softened as the EU-US trade outlook improves, but fundamentals remain supportive

Market comments on behalf of Maria Agustina Patti Financial Markets Strategist Consultant to Exness

Gold prices remained under pressure on Tuesday, as hopes for a resolution to US-EU trade tensions reduced immediate safe-haven demand. President Donald Trump’s decision to delay the imposition of a 50% tariff on European goods until July 9 allowed for renewed negotiations, and Brussels signalled its willingness to accelerate talks. This de-escalation lifted risk appetite and weighed on the bullion.

However, the broader environment remains favourable for gold. Persistent concerns over the US fiscal trajectory continue to cast a shadow over long-term economic stability. At the same time, expectations that the Federal Reserve could resume rate cuts later this year could favour non-yielding assets.

Geopolitical tensions also continue to lend underlying support to the precious metal. Tensions in Eastern Europe prompted US President Trump to consider fresh sanctions and issue strong rebukes toward the Kremlin. Meanwhile, tensions in the Middle East persist, maintaining elevated geopolitical risk.

Looking ahead, investor attention will focus on the release of the FOMC minutes on Wednesday and PCE inflation data on Friday. Soft data could drive gold prices up, while persistent inflation could reinforce the Fed’s cautious stance and temper the upward momentum on gold prices.

Zaid Barem / ymm