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Gold, the safe-haven asset, falls on optimism about trade

Gold prices for safe-havens fell on Tuesday due to some optimism about a trade agreement between the U.S.

As of 1325 GMT, spot gold declined 0.4% to $3322.93 an ounce. U.S. Gold Futures dropped 0.3% to $3332.30.

The yield on the benchmark 10-year bond hit a record high of more than two weeks, which made gold that does not pay a return less attractive. Meanwhile, the dollar rose by 0.2%.

Japan and South Korea, two of the most powerful Asian economies, said they would negotiate with the U.S. on Tuesday to reduce the impact of the sharply increased tariffs President Donald Trump plans to implement from the beginning of August.

Trump re-ignited his trade conflict on Monday by warning 14 nations they will face higher tariffs. The start date was pushed to August 1 and countries focused on the three-week window for a smoother ride.

The Trump administration is increasing pressure as the deadline of July 9 approaches. "But some optimism related trade deals are fueling risk-on sentiment and keeping gold subdued," says Peter Grant, Zaner Metals' senior metals analyst.

The markets await the minutes from the latest U.S. Federal Reserve policy meeting, due on Wednesday. Several Fed officials are scheduled to speak in the coming week and provide more insight into the economy.

Hamad Hussain is a climate and commodities economist with Capital Economics. He said that the Fed will likely delay cutting rates until next year due to the lingering inflation threat from tariffs. This will keep gold prices in check.

Investors expect a 50 basis point Fed rate cut by the end this year.

Silver spot fell 0.5% per ounce to $36.57, while platinum dropped 0.8% to 1,359.97, and palladium fell 0.2% to $1,000.77. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Shreya Biswas)

(source: Reuters)