US-EU trade negotiations weaken safe-haven demand, gold prices maintain downward trend
Due to the easing of trade relations between the US and Europe, market risk aversion has cooled, and gold prices have continued to decline slightly, with spot gold trading around $3,347 per ounce. The European Union is accelerating negotiations with the United States to avoid a trade war, which has put pressure on the demand for safe-haven assets like gold. Although gold prices have fallen $165 from historical highs, they are still up over 25% year-to-date. Citigroup predicts that gold prices will reach $3,500 in the short term, and investors are focused on the upcoming release of the US core PCE price index
According to the Zhitong Finance APP, due to signs of easing in US-EU trade relations, market risk aversion has cooled, and gold prices continue to show a slight downward trend.
Spot gold is trading around $3,347 per ounce, having fallen 0.4% on Monday. Previously, the European Union stated it would accelerate negotiations with the United States to avoid a transatlantic trade war. After US President Trump accused the EU of delaying negotiations, both sides have shown a more conciliatory attitude.
As negotiations between the White House and some trade partners make progress, demand for safe-haven assets like gold remains under pressure. Data shows that since hitting a more than one-year high in mid-April, gold ETFs have seen net outflows for five consecutive weeks.
However, the market remains in a wait-and-see mode, weighing multiple risk factors, including the expanding US fiscal deficit, ongoing trade negotiations, and the deteriorating geopolitical conflicts in the Middle East and Ukraine.
Although gold prices have fallen about $165 from last month's record high, the cumulative increase for the year still exceeds 25%. Citigroup on Monday revised its short-term gold price forecast to reach the $3,500 mark, emphasizing that gold's safe-haven attributes remain prominent amid new trade and geopolitical risks.
Additionally, investors are closely watching the US Core PCE Price Index, which will be released on Friday, as it is the Federal Reserve's preferred inflation indicator.
As of the time of writing, spot gold is basically flat at $3,345.25 per ounce. The Bloomberg Dollar Spot Index is also flat. Platinum continues its downward trend, despite having reached a two-year high last week due to tight market supply. Silver has dipped slightly, while palladium remains virtually unchanged
