Gold prices drop as Trump signals trade deals, extends tariff reprieve

Gold prices dropped on Monday after U.S. President Donald Trump signalled progress on multiple trade agreements and announced extended tariff reprieve for several countries, dampening demand for the safe-haven metal.

FUNDAMENTALS

* Spot gold was down 0.3% at $3,323.71 per ounce, as of 0028 GMT. U.S. gold futures also fell 0.3% to $3,332.20.


* The U.S. is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by July 9, Trump said on Sunday, with the higher rates scheduled to take effect on August 1.

* Trump announced in April a 10% base tariff on most countries, with additional duties of up to 50%. He later postponed the effective date for all but 10% of those tariffs from July 9. The new date grants a three-week reprieve to most affected nations.

* Concerns over tariff-driven inflation have jostled expectations for Federal Reserve policy. Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by the year-end.

* Last week, Trump signed into law a massive package of tax and spending cuts at the White House, which as per nonpartisan analysis will add more than $3 trillion to the nation's $36.2 trillion debt.

* The U.S. dollar index weakened 0.3% on Monday, after registering its second consecutive weekly loss last week. A lower dollar makes greenback-priced bullion affordable for overseas buyers.

* Elsewhere, the first session of indirect Hamas-Israel ceasefire talks in Qatar ended inconclusively, two Palestinian sources familiar with the matter said early on Monday, adding that the Israeli delegation didn't have a sufficient mandate to reach an agreement with Hamas.

* Spot silver was steady at $36.94 per ounce, platinum shed 0.3% to $1,388.06 and palladium remain unchanged at $1,134.38. DATA/EVENTS (GMT) 0600 Germany Industrial Output MM, Production YY SA May 0600 UK Halifax House Prices MM, YY June 0645 France Reserve Assets Total June.