Gold prices dropped on Monday as the United States took several unexpected steps in its trade and tariff policies. President Donald Trump extended the tariff reprieve deadline and suggested that new trade agreements could be finalized soon. This announcement came just days before the earlier deadline of July 9.
At 0626 GMT, spot gold dropped by 0.7%, reaching $3,311.09 per ounce. At the same time, U.S. gold futures declined to $3,320.30 per ounce. Analysts believe that the tariff delay has reduced short-term investor demand for safe-haven metals.
Trump stated on Sunday that the U.S. is close to signing several trade agreements. He mentioned that other countries would receive notice of higher tariffs by July 9. These tariffs are expected to take effect on August 1.
In April, the president had introduced a 10% base tariff on most countries. Some of those duties were as high as 50%. However, he later delayed implementation for 90% of the affected nations. Now, the extension gives these countries three more weeks to respond or adjust.
According to Kelvin Wong, a senior analyst at OANDA, this short-term relief caused gold prices to drop during the day. He predicted gold could rebound near the $3,320 level. However, he warned that resistance could appear around the $3,360 mark.
In addition, Trump announced a new tariff of 10% on countries supporting what he called “Anti-American policies.” These policies were linked to the BRICS group. He did not provide further explanation, leaving room for uncertainty.
This growing trade pressure has influenced expectations about interest rate cuts. Many investors no longer expect the Federal Reserve to lower rates this month. Futures show that only two minor cuts are likely by the end of the year.
Last week, Trump also signed a large tax and spending bill. Analysts say it could add $3 trillion to the U.S. national debt. The debt now stands at $36.2 trillion.
Meanwhile, silver fell by 0.9% to $36.58 per ounce. Platinum dropped 2.4% to $1,358.62. Palladium also lost 1.9%, ending at $1,113.23.
Overall, gold prices dropped again as markets adjusted to shifting U.S. trade strategies and rising economic uncertainty. Investors now await clearer signals from both the White House and the Federal Reserve. If uncertainty remains, gold prices dropped may continue to be a repeating headline this summer.
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