Gold (XAU/USD) extended its decline on Friday, trading at $3,345 by 09:30 GMT after failing to hold Thursday’s support at $3,372.
The yellow metal has now pulled back significantly from Tuesday’s highs, pressured by a shift in sentiment towards riskier assets.
Optimism over US-led trade agreements has been the key driver behind the slide. A signed deal with Japan and reports of progress with the European Union have sparked risk-on buying across equities. The proposed EU deal is said to mirror the Japanese agreement, with a 15% baseline tariff and certain exemptions.
Wall Street’s record run this week, fuelled in part by strong earnings from AI-focused firms, added to the pressure on precious metals. Gold, silver, and platinum all lost ground as investors rotated into stocks on renewed confidence in global trade stability.
Attention now turns to next week’s Federal Reserve meeting. While President Trump continues to call for immediate rate cuts, Chair Jerome Powell has held firm. He has cited uncertainty over the inflationary impact of tariffs as justification for keeping rates steady.
Tensions between Trump and Powell remain unresolved. A bizarre televised visit to the Fed on Thursday saw Trump inspect a renovation project, with awkward exchanges on camera.
The August 1 deadline for Trump’s sweeping tariff package is next week. While markets have responded positively to recent progress, key questions remain, particularly around the 50% copper tariffs, which could disrupt US supply chains and ripple across commodity markets.