Gold prices edged up in early Friday trading but remain down for the week by more than 1.7%. Bullion came under pressure as improved risk appetite in the markets diverted flows away from safe-haven assets, following the US administration’s extension of the trade truce with China and expectations that the meeting between Presidents Trump and Putin may lead to a ceasefire and pave the way towards ending the war in Ukraine. Also weighing on gold was the US PPI reading for July, which beat expectations by a wide margin, revealing an unexpected rise in wholesale prices that prompted traders to reassess and scale back bets on a Federal Reserve rate cut in September. This led to dollar gains and higher Treasury yields, further penalising the non-yielding precious metal. Against this backdrop, gold is likely to continue facing headwinds, with support around the $3,340 level, while traders’ attention is focused on Friday’s meeting in Alaska between the US and Russian presidents, which has the potential to influence geopolitical dynamics and, in turn, the price of the safe-haven metal.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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