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Khaleej Times
an hour ago
- Khaleej Times
Gold falls to near 3-week low as US-EU deal boosts risk appetite ahead of Fed meeting
Gold fell to a near three-week low on Monday as a U.S.-European Union trade accord lifted the dollar and risk sentiment, while investors awaited fresh cues on rate policy from this week's Federal Reserve meeting. Spot gold fell 0.6% to $3,316.03 per ounce as of 11:36 a.m. ET (1536 GMT), after touching its lowest level since July 9, earlier in the session. U.S. gold futures were down 0.7% at $3,313.2 per ounce. The U.S. dollar index rose to a one-week high, making bullion more expensive for overseas buyers. "I think the more trade announcements we get, the more the dollar increases. These tariff deals are dollar friendly, lowering the allure of gold and driving the sell-off amid a risk-on sentiment," said Marex analyst Edward Meir. A weekend deal between U.S. President Donald Trump and the European Commission imposed a 15% tariff on EU goods, half the rate initially threatened, easing fears of a broader trade war. That pact came on the heels of last week's U.S.-Japan agreement, while U.S. and Chinese officials will resume talks in Stockholm on Monday, aiming to extend their trade truce by another 90 days. However, a U.S. trade representative said no major breakthrough was expected with China, noting discussions would focus on monitoring and implementing existing commitments. "You're not seeing a huge move on the downside in gold because the deals could still prove to be either difficult to implement or unrealistic," said Meir. The U.S. Federal Reserve is expected to keep its benchmark rate in the 4.25%–4.50% range when its two-day meeting concludes on Wednesday. Markets, meanwhile, continue to price in a potential September rate reduction. Gold tends to do well in a low-interest-rate environment. Elsewhere, spot silver was down 0.1% at $38.12 per ounce and platinum fell 0.6% to $1,393.25, while palladium gained 2.1% to $1,245.52.


The National
an hour ago
- The National
EU-US tariff deal draws mixed reaction with French calling it 'submission'
US President Donald Trump's tariff deal with the European Union drew mixed reviews from the bloc's leaders, with some criticising the agreement that European Commission President Ursula von der Leyen struck. As part of the deal, the EU will pay a 15 per cent tariff on most goods, including cars, semiconductors and pharmaceuticals. The rate is half of what Mr Trump had previously threatened to impose on imports from the bloc. The EU also agreed to purchase billions of dollars worth of US energy and weapons as part of the deal which also involves no tariffs on US exports to Europe. The EU defended the deal on Monday. 'I'm 100 per cent sure that this deal is better than a trade war with the United States,' Reuters reported EU trade commissioner Maros Sefcovic as saying. Ms von der Leyen said it was the 'best we could get'. Other leaders across the bloc, however, were less enthusiastic. 'It is a dark day when an alliance of free peoples, united to affirm their values and defend their interests, resolves to submission,' French Prime Minister Francois Bayrou wrote on X. Hungarian Prime Minister Viktor Orban, who has a close relationship with Mr Trump, said the EU Commissioner did not stand a chance against the US President. 'It wasn't a deal that President Donald Trump made with Ursula von der Leyen. It was Donald Trump eating Ursula von der Leyen for breakfast,' he said on his podcast. The agreement was the latest announced by Washington in Mr Trump's attempts to reset the country's trade relations with its partners. As well as Japan, he announced deals with the UK and Vietnam, and has agreed to a truce with China under which the two economic powers will drastically lower tariffs on each other while negotiations continue. The EU-US agreement was similar to the one Mr Trump made with Japan, in which he set his so-called reciprocal tariffs at 15 per cent. Military dimensions "That was the template for this deal but that does not completely explain why the EU had to sign this deal,' Simon J Evenett, professor at IMD Business School in Lausanne, told The National. 'The principal reason the EU had to sign this deal is because of the continued US military support for Ukraine. That is the geopolitical overlay which created the imperative for the EU signing this deal. "Halving the tariff rate on the bloc would be an obvious attractive proposition for EU exporters, but we should be under no illusion about the importance of the military dimension here.' Together, the EU and US represent about 30 per cent of global trade in goods and services and 43 per cent of global gross domestic product, according to figures from the European Council and the Council of the EU. The EU and US trade in goods last year was valued at €867 billion ($1.01 trillion), with total transatlantic trade in goods and services valued at more than €1.68 trillion, the councils said. Leaders from Sweden and Denmark joined Mr Orban and Mr Bayrou in expressing disappointment with the agreement. Sweden's Minister for Foreign Trade Benjamin Dousa noted that the deal would bring the highest tariff rate on Europe in nearly eight decades. 'The agreement doesn't make anyone richer but it may be the least bad option," he said on X. "Increased tariffs are primarily paid by the country's own citizens, which is why most wealthy countries have lowered tariffs against the rest of the world over the past 100 years." Some members of the bloc, however, defended the deal for bringing some clarity to the trade tension between the US and EU. 'This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy hard,' Reuters quoted German Chancellor Friedrich Merz as saying. Finland's Prime Minister Petteri Orpo also said the agreement brings 'much-needed predictability' to Finnish companies and the world economy. 'Work must continue to dismantle trade barriers. Only free transatlantic trade benefits both sides the most,' he wrote. Italian Prime Minister Giorgia Meloni, who also has a friendly relationship with Mr Trump, said she considers it 'positive that there is an agreement'. 'But if I don't see the details I am not able to judge it in the best way,' she said.


The National
2 hours ago
- The National
Starmer has run out of road on Palestinian statehood
UK Prime Minister Keir Starmer's late-life emergence as a politician means that he has been dogged by questions over how politically effective his instincts are. The devastation of Gaza is something that obviously transcends politics – or at least it should. Yet, as the objective reality of the Palestinians' suffering is broadcast daily on television sets across the UK, Mr Starmer's political response to Israel's war could not be more exposed. In the 22 months since the outbreak of the conflict, Mr Starmer has been entirely consistent to the extent that he has steadily lost almost the entirety of his supporters for his position. A letter late last week exposed how the Prime Minister had been reduced to playing for time. More than 200 MPs signed a letter calling on the UK to recognise Palestine statehood, as almost 150 nation states have done. French President Emmanuel Macron has committed his country to declaring its recognition in September at the UN General Assembly annual meeting in New York. A conference this week co-hosted with Saudi Arabia at the UN sees Paris promote the two-state solution with recognition at its heart. UK Foreign Secretary David Lammy is expected to attend. Yet Mr Starmer has so far withheld the decision to join the French in the new drive to make real recognition for Palestine among the most powerful countries of the G7 bloc. For weeks, London's political calculation has been that pressure from the Knesset presented Israeli Prime Minister Benjamin Netanyahu with an opportunity to change course. There was also the arrival to Britain of US President Donald Trump, who is holding court on his Scottish golf courses. These ultra-luxury venues have not only been a sporting paradise for Mr Trump, but also a diplomatic platform for him. On Sunday, he secured a trade deal with EU, which he called the biggest yet. On Monday, Mr Starmer spent the day with him. There, aides said Mr Starmer would use his good standing with the American leader to press his point on Gaza. The British leader said he was working with Mr Trump to find a way to address the starvation of Gazans. Mr Trump said, for the first time, that the hunger in the Strip was real and couldn't be faked. 'We can work not just on the pressing issues of the ceasefire, but also on this issue of getting humanitarian aid in at volume, at speed,' Mr Starmer said. The US President said he was pressing Mr Netanyahu to find a different way to bring the plight of the hostages to a resolution. 'I'm going to say it's a very difficult situation,' Mr Trump said. 'If they didn't have the hostages, things would go very quickly, but they do, and we know where they have them, in some cases, and you don't want to go riding roughshod over that area, because that means those hostages will be killed.' The reckoning, as the UK House of Commons' Foreign Affairs Committee put it, was that Mr Netanyahu listens to only one foreign leader: Mr Trump. Even then the Israeli Prime Minister defies Washington, so only a big pep talk from Mr Starmer could get the US leader into a frame of mind to intervene meaningfully. All that was a calculation rather than a guaranteed outcome. Mr Starmer's team did not want to alienate Mr Trump by announcing the UK's recognition in advance of their meeting. Alienating the US President would provide some poor dynamics for the Scotland meetings, something Mr Starmer was not prepared to countenance. UK Secretary of State for Business and Trade Jonathan Reynolds – the cabinet minister among the closest to Mr Starmer – echoed the judgment that only the US has leverage in the current situation. He pointed out that two temporary ceasefires were brought about by US involvement. Downing Street has said the same thing, although it appears to be ignoring the fact that US envoy Steve Witkoff withdrew from the process last week. Mr Reynolds was asked repeatedly about the prospect of the Prime Minister caving into political pressure this week. Despite the recess, the cabinet is set to meet for a discussion on Palestine, setting speculation off that a U-turn was coming. In advance of any new approach emerging, Mr Reynolds raised the standing concern from Mr Starmer's camp that recognition must not be a 'tokenistic' exercise. Deploying the decision once should have a tangible impact. 'It is a case of when, not if,' he said. 'It's about how we use this moment, because you can only do it once to have a meaningful breakthrough.' That line has held sway at Westminster for quite some time. However, not only has the number of MPs in the Labour party rejecting it openly now into the hundreds, but up to half the cabinet are now holding private briefings that this cannot stand. For most, there is a moral and humanitarian imperative that cannot wait. History, too, is powerful here. As the country that intervened through the Balfour Declaration to endorse Zionism's project to settle in Palestine, there are many in London who believe that Britain has a historic responsibility to promote equal rights for Palestinians and Israelis. The Labour government that took power last year was overtly committed to 'leading on international law issues', something that suggested a spirit of rebalancing how the UK developed its policies. Most remarkably, however, Attorney General Richard Hermer has not developed a response to the International Court of Justice's provisional measures on the Gaza conflict. Mr Starmer is a distinguished lawyer in this field and if his political skills have come under scrutiny on this issue, then it is a double indictment that his legal expertise appears to have disappeared as well. There is ultimately no riddle here. Mr Starmer has played for time for so long on this issue that he has utterly run out of road for his position on Palestine.