Gold Recovers Slightly After Heavy Losses, but Trade Optimism Tempers Safe-Haven Appeal
Saturday, July 19th 2025
Gold prices ticked higher on Monday, regaining some ground after a sharp decline last week, as a softening U.S. dollar provided modest support. However, the overall appetite for the yellow metal remained subdued due to easing geopolitical tensions and renewed optimism around several major international trade agreements.
Modest Rebound from Monthly Lows
As of 06:00 ET (10:00 GMT), spot gold rose 0.4% to $3,288.30 per ounce, while August gold futures were also up 0.4% at $3,300.00. Despite the uptick, the precious metal remains on track for a monthly loss, erasing gains made earlier in July during heightened Middle East conflict.
Last week saw a near 3% drop in gold prices, the sharpest weekly fall since early May, as investor focus shifted from safe-haven positioning to improving global trade relations and a de-escalation of conflict in the Middle East.
Geopolitics Take a Back Seat as Ceasefire Holds
The decline in gold’s safe-haven demand follows the U.S.-brokered ceasefire between Israel and Iran, which has helped reduce geopolitical tension. The development dulled bullion’s traditional role as a risk hedge and gave room for more risk-on sentiment to return to global markets.
Trade Deals Spark Market Confidence
Adding to the shift in sentiment were multiple positive trade developments:
- A U.S.-China deal signed in Geneva focused on easing rare-earth export restrictions and lowering broader trade tensions.
- A new U.S.-U.K. agreement, effective Monday, slashed tariffs on autos and aircraft parts.
- Canada’s last-minute reversal of its planned digital services tax also helped ease U.S.-Canada trade friction, paving the way for potential new trade negotiations before July 21.
Despite these agreements, investors remain cautious, with a July 9 deadline looming for the reinstatement of global steel and aluminum tariffs that could reignite trade tensions.
Dollar Weakness Lends a Hand to Gold
The U.S. Dollar Index slipped further on Monday, hovering near three-year lows, which helped provide some support to gold prices. A weaker dollar typically boosts demand for commodities like gold by making them more attractive to holders of other currencies.
However, ING analysts noted that despite this tailwind, gold faces additional pressure from expectations that Fed Chair Jerome Powell may delay interest rate cuts, particularly as inflation remains above target and the full economic effects of new tariffs are still being assessed.
Platinum Surges, Silver and Copper Mixed
In the broader metals market:
- Platinum futures soared 1.9% to $1,377.00, continuing their rally and setting up for a 30% monthly gain, marking one of the metal’s strongest performances in over a decade.
- Silver futures dipped 0.2% to $35.99 per ounce, struggling to keep up with gold and platinum’s momentum.
Copper prices showed mixed signals:
- London Metal Exchange (LME) copper slipped 0.3% to $9,850.10 per ton, while
- U.S. copper futures gained 0.5% to $5.0938 per pound.
Weighing on copper was news that China’s manufacturing sector contracted in June, underscoring ongoing weakness in the world’s largest copper consumer due to elevated U.S. tariffs. ING analysts said continued LME stock withdrawals could support copper prices in the short term, but any U.S. tariff action on copper imports would likely trigger a correction, especially if global supply flows realign away from American markets.
Outlook: Gold Faces Crosscurrents Ahead
With geopolitical risks easing and trade deals reshaping investor expectations, gold’s upward momentum is being checked by shifting macroeconomic factors. Unless tensions flare again or the Fed signals dovish intentions, gold may remain rangebound for now.
Still, market watchers caution that uncertainty around upcoming tariff deadlines and central bank policy guidance could inject volatility, offering fresh catalysts for movement in both gold and broader metals markets.
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