Gold prices weakened on Friday (July 25th), weighed down by a stronger US dollar and signs of progress in US-EU trade negotiations, which have reduced safe-haven demand. Spot gold fell 1% to $3,333.12 per ounce at 11:23 a.m. ET (15:23 GMT). US gold futures fell 1.2% to $3,333.70.

The US dollar index rebounded from a more than two-week low, making bullion more expensive for overseas buyers, while the 10-year US Treasury yield held steady. "The Japan deal is significant, and there are hopes for a US-EU deal before the August 1st deadline. That's weakening safe-haven demand as rising risk appetite drives capital into riskier assets," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Following this week's US-Japan trade deal, the European Commission said a trade deal with the US was close to being reached, even as EU members agreed to retaliatory tariffs on US goods if talks fail.

Data-wise, US jobless claims fell to a three-month low, signaling a stable labor market despite slowing hiring.

Stable labor market data is expected to provide cover for the Federal Reserve to keep interest rates steady at 4.25%-4.50% at its meeting next week, even as inflation shows signs of rising due to US President Donald Trump's import tariffs.

Trump's surprise visit to the central bank marked a new attempt to pressure Chairman Jerome Powell, with the President again urging a deep interest rate cut.

"Gold may attract buying interest, perhaps at $3,300, but it probably won't reach a new all-time high until after the Fed decision," Grant said, adding that the meeting could signal an interest rate cut later this year.

Gold typically performs well during periods of uncertainty and in low-interest-rate environments. Spot silver fell 2.1% to $38.25 an ounce. Platinum fell 1.6% to $1,385.94, while palladium fell 1.6% to $1,208.20. All three metals posted losses this week. (alg)

Source: Reuters