Gold prices edged lower in Asian trading on Monday, slipping from recent highs as a strong U.S. dollar and robust labor market data reduced expectations for near-term interest rate cuts. Additionally, President Donald Trump’s extension of a trade tariff deadline offered little incentive for safe haven buying, despite new threats against the BRICS bloc.
Spot gold fell 0.7% to $3,312.12/oz
Gold futures for September delivery dropped 0.8% to $3,320.67/oz
(As of 04:10 GMT)
The pullback comes after a strong U.S. nonfarm payrolls report last week, which showed sustained labor market strength and tempered market expectations of a rate cut at the Federal Reserve’s next meeting.
Meanwhile, the dollar index hovered near recent highs, making gold more expensive for foreign buyers and further dampening demand.
Over the weekend, President Trump threatened a new 10% tariff on BRICS countries, accusing the group of promoting "anti-American" policies. However, his decision to extend the July 9 tariff enforcement deadline to August 1 signaled a less immediate risk, muting safe-haven flows into gold.
Trump stated that formal tariff letters would be sent out starting Monday, though specific rates remain unclear. The market appears to be pricing in the delay rather than the threat, especially as previous tariff levels of 10% to 50% have yet to be finalized.
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While escalating geopolitical tension typically fuels gold demand, the market appears focused on macroeconomic fundamentals for now. A strong U.S. jobs report and a firm dollar have curbed expectations for Fed rate cuts—limiting gold’s upside in the near term.
Still, gold’s long-term appeal remains intact, particularly if trade negotiations falter or if inflation surprises resurface.
