Gold Prices Decline as Trade Tensions Between U.S. and EU Subside

Gold prices declined at the start of the week, retreating from recent gains after U.S. President Donald Trump announced an extension of the deadline for reaching a trade agreement with the European Union to July 9. This decision effectively postponed his earlier threat to impose a 50% tariff on EU imports starting June 1.

Spot gold fell by 0.5% to $3,339.13 per ounce, while U.S. gold futures dropped 0.8% to $3,337.40 per ounce, according to Reuters data.

Trump’s move to delay the imposition of tariffs followed remarks from the President of the European Commission, who stated that the EU needed more time to secure a “good agreement.” This development helped ease trade-related tensions, thereby reducing demand for gold as a safe-haven asset.

Gold had previously surged by over 2% on Friday, supported by investor flight to safety amid fears of an escalating trade war. This came after Trump recommended a 50% tariff on EU imports and suggested a 25% tariff on iPhones manufactured outside the United States.

At the same time, the U.S. dollar index fell to its lowest level in nearly a month against other major currencies. A weaker dollar tends to support gold prices by making the metal cheaper for investors holding other currencies.

Among other precious metals, silver slipped 0.3% to $33.36 per ounce. Platinum rose 0.1% to $1,095.90, while palladium gained 0.8% to $1,000.83 per ounce.