Gold prices declined on Monday as optimism surrounding the easing of U.S.-China trade tensions dampened safe-haven demand. In addition, a stronger-than-expected U.S. jobs report tempered expectations regarding interest rate cuts by the Federal Reserve.
In Dubai, gold rates saw a slight uptick, with 24-carat gold rising by AED0.50 to reach AED399.25. Similarly, 22-carat gold saw an increase of AED0.75, bringing its price to AED370.00. Furthermore, 21-carat gold is now priced at AED353.25, while 18-carat gold reached AED302.75.
Spot gold fell 0.4 percent to $3,298.12 an ounce as of 02:14 GMT (trading now above $3,311). U.S. gold futures lost 0.9 percent to $3,317.40 (trading now above $3,332). Three senior aides of U.S. President Donald Trump will meet with their Chinese counterparts in London later today to discuss resolving the trade dispute between the two largest economies, a standoff that has kept global markets on edge.
“Short-term traders do not want to take aggressive long positions right now ahead of the outcome of U.S.-China talks,” Reuters reported, citing Kelvin Wong, senior market analyst, Asia Pacific at OANDA. However, tariffs are unlikely to disappear; rather, talks may lower the baseline, Wong added. He noted that the cost of doing business in the U.S. will remain elevated, and the widening U.S. budget deficit could create a double feedback loop that exacerbates inflationary pressures.
The U.S. economy added 139,000 jobs in May, surpassing analysts’ expectations, while the unemployment rate remained unchanged at 4.2 percent, according to the Labor Department. Wage growth exceeded forecasts, diminishing the likelihood of imminent rate cuts. Investors have scaled back bets on rate cuts and are now anticipating one reduction in October, while they await the U.S. CPI data due on Wednesday for further insights.
Meanwhile, Trump indicated that a decision regarding the next Fed chair would be announced soon, adding that a “good Fed chair” would lower rates. On the geopolitical front, Trump’s order banning citizens of 12 countries from entering the U.S. takes effect today. Non-yielding bullion, often viewed as a safe-haven asset during economic and geopolitical uncertainties, tends to perform well in a low-interest-rate environment.
Elsewhere, spot silver remained unchanged at $35.97 per ounce, platinum fell 0.5 percent to $1,163.64, while palladium held steady at $1,046.18.
