Gold prices fell 0.4% on Monday and slid as much as 0.8% after Brussels said it would speed up trade talks with Washington. The move raised hopes of avoiding a transatlantic trade war, reducing demand for the safe-haven metal.
Dollar Rises on Japanese Issuance News
The dollar strengthened after reports that Japan’s government may cut its bond issuance. A firmer dollar makes gold more expensive for holders of other currencies, further pressuring prices.
ETF Outflows Signal Waning Appetite
Gold-backed exchange-traded funds (ETFs) have seen outflows for five straight weeks. ETFs peaked in mid-April at their highest level in over a year, but have since faced withdrawals as investors pivot away from safe assets.
Balancing Risks: Deficits, Trade, and Geopolitics
Despite fading safe-haven demand, markets remain cautious. Key concerns include the widening U.S. deficit, ongoing trade negotiations, and conflicts in the Middle East and Ukraine.
Year-to-Date Gains vs. Record High
Gold is up more than 25% this year but still trades about $180 below last month’s record peak. Citigroup on Monday raised its near-term gold forecast to $3,500 per ounce.
Fed’s Inflation Gauge in Focus
Investors now await Friday’s release of the U.S. personal consumption expenditures (PCE) price index—excluding food and energy—the Federal Reserve’s preferred inflation measure. Its reading could sway gold’s next move.
Spot gold stood at $3,324.60 per ounce as of 7:06 a.m. in London, down 0.7%. The Bloomberg Dollar Spot Index rose 0.1%. Platinum, silver, and palladium also fell, extending losses from last week’s highs.
