Gold falls to one-month low as trade optimism spurs risk appetite

Synopsis

Gold prices experienced a decline, reaching a more than one-month low due to easing U.S.-China trade tensions, which diminished safe-haven demand and encouraged investors to shift towards riskier assets. Adding to the market dynamics, President Trump's trade actions with Canada and comments on Federal Reserve interest rates influenced investor sentiment.

Gold prices fell to their lowest in more than a month on Monday as easing trade tensions between U.S. and China dampened safe-haven demand and prompted investors to pivot toward riskier assets.

FUNDAMENTALS

* Spot gold was down 0.3% at $3,264.64 per ounce, as of 0055 GMT, after hitting its lowest level since May 29. * U.S. gold futures fell 0.4% to $3,275.30.

* Asian shares firmed on Monday, while the benchmark 10-year Treasury yields edged higher. * The United States and China have resolved issues surrounding shipments of rare earth minerals and magnets to the U.S., Treasury Secretary Scott Bessent said on Friday, adding the Trump administration's various trade deals with other countries could be done by the Sept. 1 Labor Day holiday.

* Meanwhile, U.S. President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting U.S. technology firms, saying that it was a "blatant attack" and that he would set a new tariff rate on Canadian goods within the next week.

* The ceasefire between Iran and Israel after a 12-day conflict also appeared to be holding, further reducing safe-haven demand.

* Stable geopolitical and economic conditions often reduce demand for gold as a safe-haven asset, while non-yielding bullion's appeal further wanes in a high-interest-rate environment.

* Trump said on Friday he would not appoint anyone to head the U.S. Federal Reserve who would not lower interest rates.

* Elsewhere, Senate Republicans pushed forward President Trump's sweeping tax cut and spending bill on Sunday in a marathon weekend session even as a nonpartisan forecaster said it would add an estimated $3.3 trillion to the nation's debt over a decade.

* Spot silver was down 0.4% at $35.84 per ounce, platinum firmed 0.4% to $1,344.63, while palladium fell 0.6% to $1,127.23. DATA/EVENTS (GMT) 0600 UK GDP QQ, YY Q1 1200 Germany CPI Prelim YY June 1200 Germany HICP Prelim YY June.

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