Gold Cuts Short Rally As Optimism On Trade Deals Rises

(RTTNews) - After a three-day rally, gold price fell on Wednesday, pressured by fresh optimism in the markets as the US strikes new trade deals with its trading partners.

Front Month Comex Gold for July delivery slumped by $45.10 (or 1.31%) to $3,394.10 per troy ounce today.

Front Month Comex Silver for July delivery edged down by 4.20 cents (or 0.11%) to $39.278 per troy ounce today.

US President Donald Trump's "reciprocal tariffs" suspension period ends on August 1. To avoid mammoth tariffs, major trading partners are negotiating with the world's largest economy.

While the UK and Indonesia have made deals and the US and China are committed to a tariff de-escalation, and Vietnam closing in, today Trump announced the conclusion of a framework agreement with Japan which consists of a 15% American tariff on Japanese imports - significantly lower than the earlier threat of 25%.

Treasury Secretary Scott Bessent stated that he will meet his Chinese counterparts in Stockholm next week for the third round of trade talks.

Positivity lingers as traders believe that the US might reach deals with other countries, sooner or later.

The Philippines have struck a trade deal with the US.

India and the EU are exploring all possibilities for a mutually beneficial agreement.

On the US data front, the Mortgage Bankers Association's Index in the US has increased to 255.50 points in the week ending on July 18. The MBA Purchase Index has increased to 165.10 points.

A report released by the National Association of Realtors showed existing home sales in the U.S. pulled back by more than expected in the month of June.

NAR said existing home sales slumped by 2.7 percent to an annual rate of 3.93 million in June after jumping by 1.0 percent to a revised rate of 4.04 million in May.

Economists had expected existing home sales to fall by 0.5 percent to an annual rate of 4.01 million from the 4.03 million originally reported for the previous month.

The Federal Reserve seems unlikely to cut interest rates in the near future, as recent economic data revealed a stable job market and decent retail sales.

Reiterating his call for lowering the rate by three points from the current number, Trump also doubled down on the Fed Chair Jerome Powell for being unreasonably stubborn.

On the geopolitical front, drone and missile strike on Israeli strategic locations by Yemen's Houthi rebels and Israel's counter-attacks in the past few days have raised concerns of a fresh long-drawn conflict. No fresh attacks have been reported today though.

Pressured by EU sanctions, Iran has conceded to resume negotiations on its nuclear program. Iranian officials are sitting together with European counterparts (from Britain, Germany, and France) on Friday in Istanbul, Turkey to find a settlement.

Analysts predict that safe-haven assets could face downward pressure as more and more pacts get signed between the US and its trading partners in the coming days.