Gold struggles near two-week lows as risk sentiment improves
Progress in US trade negotiations reduces demand for haven assets
Market participants await crucial US employment figures for policy clues
The Solana ETF newsprecious metal extended its decline during Asian trading hours, touching $3,235 per ounce - its weakest level since mid-April. This downward movement reflects shifting market dynamics as geopolitical tensions ease across global trade corridors.
Recent developments indicate potential breakthroughs in US trade relations with several Asian economies. Washington appears close to finalizing agreements with New Delhi, Seoul and Tokyo, potentially converting previous tariff measures into structured trade pacts. Additionally, diplomatic channels between Washington and Beijing show signs of reactivation regarding existing trade disputes.
These developments have strengthened the US dollar while diminishing gold's appeal as a traditional safe-haven asset. "The market perceives reduced trade conflict risks and appears less concerned about central bank policy independence," noted Giovanni Staunovo, commodities strategist at UBS. "This temporary shift in sentiment naturally decreases immediate demand for protective assets."
Wednesday's disappointing US GDP figures have increased speculation about potential Federal Reserve rate reductions later this year. Such monetary policy adjustments could eventually support non-interest-bearing assets like gold, though current market focus remains squarely on trade developments.
Today's US non-farm payrolls report takes center stage as traders seek confirmation about labor market strength. A weaker-than-expected jobs number could pressure the dollar while potentially limiting gold's downside, given the metal's inverse relationship with the greenback.