Gold prices remain under pressure after data released last week from the US And China eased worries on the global economy. While risk sentiment increases due to the US and China coming close to the final round of trade talks, yellow metal is having difficulty in having upper movement since safe haven appeal faded away. EU Trade Commissioner Cecilia Malmstöm said on Monday that the EU is ready to start trade talks with the US to discuss tariff issues, with intentions of ending discussions by next year. France opposed the decision while Belgium abstained. In the meantime, trade talks between the US and Japan to negotiate tariffs on agricultural and industrial products started on Monday.
While risk sentiment increased after global economic slowdown concerns eased due to data released last week showing US unemployment benefits applications were at 49-year low and China’s exports in March exceeded expectations, gold prices remained pressured by positive economic data.
As of 15:26 GMT+3, spot gold was trading at $1,284.43 while dollar index was at 96.94. US 10-year Treasury bill edged up to 2.585.
UBS Wealth Management analyst Dominic Schneider said on Reuters that economic data from countries like China was the main reason of gold prices being under pressure as he added US 10-year Treasury yield recovering from March lows was also another factor weighing on prices.
In the meantime, EU Trade Commissioner Cecilia Malmström said on Monday that the EU was ready to start trade talks with the US, with intentions to end it by the end of this year. While France opposed and Belgium abstained the decision, EU officials said agricultural products would not be a part of the negotiations. EU Commission said cars would be discussed as a part of industrial tariffs while Malmström stated that agriculture was the red line for the EU and underlined it would not be discussed in the trade talks.
However, since the US officials insist on US agricultural products to be allowed to enter the EU market, it is stated that the Congress would not approve a trade deal which does not include agricultural products. US Trade Representative Robert Lighthizer stated earlier that there would be no US-EU free trade agreement unless the EU allowed US agricultural products in the EU market. On the other hand, EU side decided not to finalize any kind of trade deal until the US lifts tariffs imposed on steel and aluminum and to suspend trade talks if the US tries to add new tariffs.
By the way, trade talks between the US and Japan to discuss tariffs on agricultural and industrial products started in the US on Monday. US President Donald Trump have already stated his discomfort on the trade deficit with Japan, which is around $68 billion currently. While there was not much details leaked about the talks, Mizuho Research Institute senior researcher Junichi Sugawara said, the US did not intend to spend much time on trade talks with Japan and would like to come to a final deal quickly. However, how the negotiations will end remains uncertain since Japan, as well, is reluctant to open its market to American agricultural products.