Gold prices dropped Monday amid reduced geopolitical worries, as investors shifted focus to critical U.S. inflation data set to be released this week.
By 04:30 ET (08:30 GMT), Spot Gold declined 1% to $3,365.26 an ounce, while December Gold Futures fell 2.1% to $3,419.90 per ounce.
Calm before the Ukraine summit
The gold market continued its recent downturn, influenced by the approaching meeting between U.S. President Donald Trump and Russian President Vladimir Putin on August 15 in Alaska, aimed at negotiating an end to the conflict in Ukraine. The passing of Trump’s deadline without harsher U.S. sanctions on Russia contributed to easing investor concerns, lowering demand for gold as a safe haven.
“But with Russia demanding that Ukraine cede occupied territory to end the war, it’s difficult to see a quick solution,” said analysts at ING, in a note. “It’s unlikely that Ukraine will agree to give up its own territory.”
Inflation data takes center stage
Market attention now turns to key inflation indicators from the U.S. The Consumer Price Index (CPI) for July is due Tuesday, followed by the Producer Price Index (PPI) later in the week.
Traders are awaiting these readings to help gauge the Federal Reserve’s policy direction, with expectations of a September rate cut priced near 90% following disappointing employment numbers earlier this month.
The U.S.-China tariff truce, which has paused escalation of import duties, expires on August 12. While optimism exists for its extension, uncertainty remains high.
Tariff uncertainty hits gold imports
Last week, gold futures climbed to a record above $3,530 an ounce after the U.S. Customs and Border Protection ruled that standard 1-kilogram and 100-ounce gold bars would be subject to import tariffs.
This ruling caused disruptions in bullion flows, with some Swiss refiners halting shipments to the U.S., Reuters reported. Industry groups warned this move could negatively impact the global gold trade, especially since Switzerland is a major refining hub.
“However, this has now eased, with reports that the White House will clarify the issue with an executive order amid suggestions that gold bar imports won’t face tariffs,” ING added.
Other metals retreat
Other precious metals also saw declines: Platinum Futures slipped 0.7% to $1,330.80 per ounce, and Silver Futures dropped 1.4% to $37.990 per ounce.
Copper futures softened as well, with contracts on the London Metal Exchange down 0.1% to $9,751.50 per ton and U.S. Copper Futures falling 0.5% to $4.4485 per pound.
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