Gold prices edged lower on Friday, as signs of progress in trade negotiations between the U.S. and its trading partners weighed on safe-haven demand, although an overall weaker dollar limited losses for bullion.
Spot gold was down 0.1% at $3,363.91 per ounce, as of 0243 GMT. However, bullion has gained 0.4% so far this week. U.S. gold futures fell 0.2% to $3,365.50.
“Basically we are seeing some profit-taking from short-term bullish speculators due to the fact that we now start to see this trade-deal optimism in the market,” OANDA senior market analyst Kelvin Wong said.
“However, the dollar is in a weakening bias and on top of that, we still have the Fed rate cuts pretty much alive at this juncture, which are supporting gold near $3,360 level.”
The European Union and the United States now appear to be heading towards a possible trade deal, according to EU diplomats, which would result in a broad 15% tariff on EU goods imported into the U.S., mirroring a framework agreement Washington struck with Japan.
The S&P 500 and the Nasdaq notched record closing highs overnight as signs of easing global trade tensions lifted risk sentiment among investors.
Offering respite to gold, the U.S. dollar index (.DXY) was headed for its worst week in a month, making greenback-priced gold less expensive for other currency holders.
Data showed U.S. jobless claims unexpectedly fell last week, signalling a steady labour market despite sluggish hiring making it harder for the unemployed to find work.
The Federal Reserve is also widely expected to leave rates unchanged at its July 29–30 meeting, but markets continue to price in a potential rate cut in September.
Spot silver rose 0.2% at $39.14 per ounce and was on track for a weekly gain, up 2.5% for the week. Platinum eased 0.2% to $1,407.10 and palladium climbed 0.9% to $1,238.73.
