Gold prices eased during Asian trade on Tuesday after reaching monthly highs early in the session, as investors locked in profits and weighed ongoing uncertainty surrounding U.S. trade policy and Federal Reserve independence.
By 3:30 pm AEST (5:30 am GMT) spot gold slipped $9.25 or 0.3% to US$3,387.82 per ounce.
The modest retreat followed Monday’s nearly 1.4% surge, with investors turning cautious ahead of key earnings results from Alphabet Inc due Wednesday.
The pause in gold’s rally also coincided with a stabilisation in the U.S. dollar and U.S. Treasury bond yields, which had been under pressure earlier in the week.
Gold’s performance remains closely tied to the U.S. dollar, which has faced renewed pressure amid escalating concerns over U.S. trade negotiations. Mounting uncertainty surrounding potential deals with both Japan and the European Union has clouded the economic outlook and put the greenback on the defensive.
According to the Wall Street Journal, U.S. officials have informed the .EU.’s trade chief that President Trump is likely to demand further concessions in ongoing trade talks, including a higher baseline tariff of 15% or more on most European goods, a significant increase from the previously discussed 10%.
In response, E.U. diplomats said the bloc is considering a broader set of countermeasures as the prospects for a deal diminish.
Meanwhile, political instability in Japan has raised doubts about whether a U.S.-Japan trade agreement can be finalised before the 1 August deadline.
The U.S. dollar has also been weighed down by falling Treasury yields amid ongoing concerns about the Federal Reserve’s independence.
President Trump’s repeated calls for Fed Chair Jerome Powell to resign have added to investor unease over the central bank’s policy direction, while Treasury Secretary Scott Bessent on Monday called for a broader review of the Federal Reserve, extending beyond the current controversy over building renovations to assess the institution’s overall effectiveness.
