Gold slipped as its haven status was impacted by signs US President Donald Trump may be easing his aggressive stance on trade with the European Union, after he extended a deadline on sweeping tariff measures.
Bullion traded near US$3,350 ($4,301.57) an ounce, after climbing by almost 5% last week, as Trump on Sunday announced that his plans to hit the EU with 50% tariffs would be delayed until July 9 to allow for time for both sides to negotiate a deal.
The US leader on Friday had threatened higher-than-expected levies against the bloc, while also warning Apple that it would be subject to 25% tariffs if it does not manufacture its iPhones in the US.
The trade war unleashed by the new US administration has helped push gold higher by more than a quarter this year, with prices currently trading about US$150 below an all-time-high set last month.
While a softer stance on trade would weaken haven demand, gold’s safety appeal has strengthened amid growing concerns about the fiscal position of the US government after Moody’s Ratings this month stripped the US of its top credit rating.
Investors are concerned that Trump’s signature tax bill — which last week passed the House and now goes to the Senate — will further swell the deficit.
See also: Gold edges lower on stronger dollar ahead of US labour figures
Looking ahead, traders will be digesting an array of economic metrics due this week — such as sales of durable goods and homes, and measures of consumer sentiment. US markets will be closed Monday due to the Memorial Day holiday.
Spot gold was down 0.3% to US$3,346.82 an ounce as of 7.22am in Singapore. The Bloomberg Dollar Spot Index was steady. Silver and palladium were little changed.
Meanwhile, platinum extended gains after reaching the highest in two years on Friday. The metal advanced 11% last week — the biggest weekly gain in more than four years — with concerns about a deficit and renewed jewellery demand in China adding to tightness.
