Gold eased on Wednesday as risk appetite improved after U.S. President Donald Trump announced a trade deal with Japan ahead of an impending tariff deadline, though a soft dollar and lower Treasury yields capped losses for greenback-priced bullion.
Spot gold was down 0.2% at $3,423.44 per ounce, as of 0136 GMT, after hitting its highest point since June 16 earlier in the session.
US gold futures also slipped 0.2% to $3,437.70.
Trump said the U.S. and Japan had struck a trade deal that includes a 15% tariff that will be levied on U.S. imports from the country.
U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline to August 12 for negotiating a trade deal, U.S. Treasury Secretary Scott Bessent said.
“If further trade deals are signed ahead of August 1, this could further boost general risk appetite and reduce the demand for gold,” CM Trade Chief Market Analyst Tim Waterer said.
“But if the USD remains pressured this will keep a return to $3,500 a viable near-term prospect for the precious metal.”
Japanese shares led an Asian share market rally on Wednesday after Trump announced Japan trade deal.
Offering support to bullion, the U.S. dollar index languished near a two-week low against its rivals, making greenback-priced gold less expensive for other currency holders.
Benchmark 10-year U.S. Treasury yields on Tuesday touched their lowest level since July 9.
Meanwhile, Trump continued his attack on U.S. Federal Reserve Chair Jerome Powell, calling him a “numbskull” who has kept interest rates too high and said he will be out in eight months.
“These are low-liquidity conditions and that could just easily see volatility recede should the pressure on Powell’s firing ease. Bears may therefore be lurking to fade into moves below $3,500,” said Matt Simpson, a senior analyst at City Index.
Elsewhere, spot silver fell 0.3% to $39.15 per ounce, platinum dropped 0.3% to $1,437.83 and palladium slipped 0.8% to $1,264.96.
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