Gold Prices Stabilize Near Two-Week Low After US-EU Trade Deal

Gold prices stabilized during Monday's trading, near their lowest levels in about two weeks, influenced by improved investor sentiment following the announcement of a framework trade agreement between the United States and the European Union, reducing demand for safe-haven assets.

According to data, the price of gold in the spot market held at $3339.28 per ounce, after touching its lowest level since July 17. Futures contracts for gold in the United States also settled at $3340.00 per ounce.

This development came after Washington and Brussels announced on Sunday a framework agreement to impose a 15% tariff on most European exports, half the rate previously threatened by the United States. The agreement helped avoid a trade escalation between the two parties, which together represent about a third of global trade.

This agreement resembles the framework agreement previously reached between the United States and Japan, but it did not resolve some outstanding issues, such as tariffs on alcoholic beverages, which remain a point of contention between the two sides.

The agreement boosted investor confidence, leading to an increase in US stock futures, as well as strengthening European currencies. The dollar index also fell by 0.1%, reducing the cost of gold denominated in dollars for buyers outside the United States.

It is widely expected that the US Federal Reserve will keep the interest rate within the current range of 4.25% - 4.50% at the end of its meeting on Wednesday. Federal Reserve Chairman Jerome Powell had previously emphasized the need to wait for further economic data before making any new decisions on monetary policy.

In a sign of possible monetary policy easing, US President Donald Trump described his meeting with Powell on Friday as "positive," hinting at the Fed's openness to future interest rate cuts.

Senior negotiators from the United States and China are scheduled to hold a meeting today in Stockholm in an attempt to extend the current tariff truce before the deadline set on August 12.

As for other precious metals, silver prices in the spot market saw a slight increase of 0.1% to $38.17 per ounce, while platinum rose by 0.9% to $1413.50. Palladium also increased by 0.5% to reach $1225.25 per ounce.