Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold fell 0.7% to close near a three-week low above $3,310 after a weekend trade agreement between the US and EU boosted Treasury yields and the dollar, undercutting alternative stores of value. Silver slipped 0.4% to finish at $38.03 an ounce.

President Trump and EC President Ursula von der Leyen announced a trade deal that imposes 15% tariffs on goods imported into the US, half of the draconian 30% that each side had been threatening. The deal echoes the one with Japan in carving out exceptions.

Trump today declared that all other nations�some 200�who do no strike individual deals will be subject to tariffs of 15% to 20%, much stiffer than the 10% global tariff he imposed in April. No movement on a China deal has been reported.

Benchmark 10-year Treasury yields rose above 4.4% as investors, relieved that another trade war has been averted, shifted out of the perceived safety of government debt. Rising yields are a headwind for gold because they increase the opportunity cost for holding the non-yielding asset instead of bonds for safety.

Tracking with yields, the dollar climbed 1% against major rivals, in part because the inflationary potential of tariffs may slow the Fed in cutting interest rates. A stronger dollar weighs on gold and other commodities by making them pricier overseas.

Traders await this week's meeting of the Fed for further clues on the direction of interest rates. Despite often extreme pressure from the White House to lower rates, the Fed is widely expected to leave rates unchanged, awaiting more evidence on the effects of trade policies.

Platinum fell 1.3% while palladium rose 1.3%.

At the New York spot close: gold slipped $23.70 to $3,310.30; silver slid 14 cents to $38.03; platinum dropped $18.60 to $1,388.80; and palladium picked up $16.20 to $1,245.90 an ounce.