Spot Gold retreated over 0.5% on Monday, as the US indicated progress on a number of trade agreements and announced extended tariff reprieve for several countries. These developments weighed on traditional safe-haven assets.
US President Donald Trump said over the weekend that the US was nearing finalization of several trade agreements in the coming days and would inform other countries of higher tariff rates by July 9th. The higher tariffs are set to take effect on August 1st.
Concerns regarding tariff-related inflation have affected Fed policy expectations. Market players no longer expect a rate cut by the Federal Reserve in July. What is more, markets are now pricing in only two 25 bps rate cuts by year-end.
Those expectations were also reinforced by stronger-than-expected US jobs data from last week.
At the same time, US Congress passed the Trump administration’s tax-cut and spending bill, which added to fiscal concerns.
According to the Congressional Budget Office, the bill is estimated to add $3.4 trillion to the US national debt over a decade.
Spot Gold was last down 0.80% on the day to trade at $3,309.87 per troy ounce.
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