By Anmol Choubey
(Reuters) – Gold prices fell on Wednesday as a U.S.-Japan trade deal announced by U.S. President Donald Trump lifted risk appetite, while higher Treasury yields added further pressure.
Spot gold was down 0.2% at $3,425.58 per ounce, as of 1010 GMT, after hitting its highest point since June 16 earlier in the session.
U.S. gold futures also slipped 0.2% to $3,437.90.
Trump struck a trade deal with Japan that lowered tariffs on auto imports and spared Tokyo from punishing new levies on other goods in exchange for a $550 billion package of U.S.-bound investment and loans.
“Spot gold is paring some of its gains as the U.S.-Japan trade deal diluted demand for safe havens. The U.S. dollar’s slight rebound is also weighing on bullion, though it’s only natural that bullion bulls take a breather after the 3-day rally,” said Han Tan, chief market analyst at Nemo.Money.
The U.S. dollar index steadied against its rivals after three straight sessions of losses, while benchmark 10-year U.S. Treasury yields rebounded from near-two-week lows. [USD/][US/]
Higher bond yields increase the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies.
U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal, U.S. Treasury Secretary Scott Bessent said.
Investors are also focussed on the U.S. Federal Reserve’s policy meeting scheduled for July 29-30, with market expectations that rates will be held steady.
Elsewhere, spot silver rose 0.2% to $39.37 per ounce, its highest level since late September, 2011.
“Silver’s supply-demand fundamentals are attractive and warrant a re-rating of prices higher and now that it is at a fresh 14-year-high, it remains to be seen whether the conviction is sufficient to breach the psychologically important $40 level,” independent analyst Ross Norman said.
Platinum rose 0.2% to $1,444.40 and palladium gained 1% to $1,286.93.
(Reporting by Anmol Choubey in Bengaluru, additional reporting by Ishaan Arora; Editing by Rachna Uppal and Louise Heavens)
