Gold Prices Slip As Dollar Strengthens Following US-EU Trade Deal

Gold prices edged lower on Monday in choppy trading after the dollar gained following a trade agreement between the U.S. and the UK.

The EU agreed to a baseline tariff of 15% for its exports to the U.S., including automobiles. The 27-nation bloc also agreed to American energy products worth $750 billion and pledged to invest $600 billion in the U.S.

Spot gold prices slipped 0.1% to $3,335.39 per ounce at 04.53 a.m. ET, while the U.S. dollar index, which compares the greenback with a basket of currencies, advanced 0.5%. A stronger U.S. currency makes bullion more expensive for overseas buyers.

"If more ‘trade deals’ are reached, this could help to reduce this source of policy uncertainty that has weighed against the dollar, at least for now,” Paul Mackel, global head of FX research at HSBC, noted, according to a Reuters report.

Retail sentiment on Stocktwits regarding the SPDR Gold Shares ETF (GLD) remained in the ‘bullish’ territory at the time of writing.

Separately, U.S. and Chinese officials will meet in Stockholm to extend a tariff truce beyond the Aug. 12 deadline. Key topics of discussion include how long the tariff truce will last, U.S. levies linked to fentanyl trafficking, and China’s imports of sanctioned oil from Russia and Iran. Trump said on Sunday that his administration was “very close” to securing a trade deal with China.

Easing of trade tensions could stem the safe-haven inflows into bullion. Gold prices have rallied this year as Trump’s initial salvo of tariffs threatened to derail global economic growth.

Investors will also examine a basket of U.S. data this week, including inflation, employment, and GDP, which will determine the Federal Reserve’s stance on benchmark interest rates.

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