Gold prices fall due to trade tensions and reduced expectations of Fed rate cuts

Gold prices were pressured by trade tariffs as U.S. President Trump threatened to impose tariffs on imports from 14 countries unless trade imbalances were addressed. The delay in implementation eased market fears, but a strong U.S. jobs report reduced expectations of a Fed rate cut, pushing Treasury yields higher and weighing on gold demand. Gold prices fell towards $3,330 amid optimism for potential trade deals, with analysts at Citi noting possible support near $3,250 or a rebound to $3,400.

The euro declined by 0.6% due to concerns about trade tensions and reduced expectations of Fed rate cuts. President Trump’s announcement of new tariff rates targeting 14 countries affected currency markets, especially major exporters such as Japan and South Korea. EUR/USD started to rise, but investors should monitor U.S. trade policy for potential market impact.

The British pound weakened by 0.33% as investors awaited clarity on the U.K.’s fiscal path amid Labour’s retreat on welfare reforms. Markets continue to price in a rate cut by the Bank of England in September, as policymakers navigate softening economic data and potential tax rises. Global trade tensions and Trump’s tariff threats have added to market uncertainty, weighing on sterling as investors seek safer assets. GBP/USD rebounded amid concerns over the U.K.’s fiscal outlook and the possibility of tax rises in the autumn budget.

Read more at Investing.com: Gold Prices Slip Amid Trump’s Tariff Delay and Fed Rate Cut Speculations