Gold Falls as Market Sentiment Improves After US-Japan Trade Deal

Gold markets witnessed a decline today, Wednesday, July 23, in prices as investors' sentiment towards risky assets improved following the announcement by US President Donald Trump of reaching a trade agreement with Japan before the specified deadline for imposing tariffs. However, the weakness of the dollar and the decrease in government bond yields limited the losses incurred by the precious metal.

Gold in spot trading recorded a slight decrease of 0.2% to settle at $3422.59 per ounce, after earlier touching its highest levels since June 16. On the futures front, prices fell by the same percentage to reach $3435.40 per ounce.

This decline coincided with the White House's announcement of a new trade agreement with Tokyo, which includes imposing a 15% tariff on certain imports from Japan. On the other hand, US Treasury Secretary Steven Mnuchin revealed a meeting between American and Chinese officials in Stockholm next week to discuss extending the final deadline for reaching a trade agreement between the two countries until August 12.

Tim Waterer, Senior Market Analyst at CMC Markets, commented on these developments, saying: "Reaching more trade agreements before August 1 may boost demand for risky assets at the expense of gold, but the continued weakness of the dollar may push the yellow metal back to the $3500 per ounce level in the near term".

In a related context, other precious metals markets experienced a downward movement where silver dropped to $39.15 per ounce, platinum decreased to $1437.83, and palladium fell to $1264.96 per ounce.