Gold Retreats Amid Dollar Recovery and US-EU Trade Convergence

Gold prices recorded a significant decline at the close of trading on Friday, July 25, influenced by the recovery of the US dollar and indications of progress in trade negotiations between the United States and the European Union, reducing demand for the yellow metal as a safe haven.

Gold fell in spot trading by 0.9% to reach $3,336.01 per ounce, while US gold futures dropped by 1.1% to $3,335.6.

This decline came as the dollar index recovered from its lowest levels in over two weeks, increasing the cost of gold for holders of other currencies. Yields on US ten-year Treasury bonds also rose, adding selling pressure on the precious metal.

Peter Grant, Vice President of Zaner Metals and its chief metal analyst, pointed out that "the agreement reached by Japan is important, and there is hope for a deal between the United States and the European Union before the deadline in early August," adding that "this weakens demand for safe havens, as increased risk appetite drives capital towards high-risk assets."

In a related context, European diplomats reported that the United States and the European Union are nearing a trade agreement that may include a general 15% tariff on European goods, following Washington's recent agreement with Tokyo.

The S&P 500 and Nasdaq indices rose to new record levels at the close of Friday's session, supported by improved investor sentiment amid optimism about easing trade tensions.

On the other hand, US data showed an unexpected drop in jobless claims last week, indicating labor market stability despite slowing employment rates.

Analysts expect the Federal Reserve to keep interest rates unchanged during its July 29-30 meeting, while markets anticipate a possible rate cut in September.

As for the performance of other metals, silver saw a slight decline of 0.4% to $38.91 per ounce, despite heading for a weekly gain of 2%. Platinum fell by 1.6% to $1,229.94, while palladium rose by 0.9% to $1,238.73.