Gold extends losses after trade deal hopes curb safe-haven demand
Spot gold was down 0.6% at $3,367.92 per ounce, as of 0758 GMT, after shedding 1.3% in the previous session. U.S. gold futures dropped 0.7% to $3,372.70.
Following this week's trade deal between the U.S. and Japan, two European diplomats said on Wednesday the European Union and the U.S. are also edging toward a trade deal that could include a 15% U.S. baseline tariff on EU goods and exemptions.
"Gold is down this morning due to the positive news flow around global trade... this is reducing downside risks for global growth and supports the prevailing risk-on mood in financial markets," said Carsten Menke, an analyst at Julius Baer.
The trade expectations meanwhile drove risk sentiment in the wider financial markets.
"Demand from safe-haven seekers has cooled while central bank buying stays sound, even though not as strong as earlier in the year. We still expect gold to move higher in the longer term," Menke said.
A safe-haven asset during times of economic uncertainties, gold also tends to do well in a low-interest rate environment.
U.S. President Donald Trump will visit the Federal Reserve on Thursday, the White House said, which could intensify tensions between the administration and the central bank.
The Fed's policy meeting, scheduled for July 29-30, is expected to maintain interest rates within their current range. Investors anticipate the central bank will resume rate cuts in September.
Elsewhere, the European Central Bank is also expected to keep interest rates steady on Thursday.
Spot silver slipped 0.6% to $39.03 per ounce, platinum lost 0.4% at $1,406.28 and palladium dipped 0.9% to $1,266.27.
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