By Brijesh Patel
(Reuters) -Gold prices rose on Tuesday as initial euphoria over the U.S.-EU trade truce ebbed, while investors looked forward to the upcoming Federal Reserve policy meeting for clarity on the U.S. interest rate trajectory.
Spot gold was up 0.2% at $3,320.04 per ounce, as of 1130 GMT. Bullion hit its lowest point since July 9 on Monday.
U.S. gold futures gained 0.3% to $3,318.50.
“We are seeing a reset of sentiments in the market after a couple of trade deals, but there are still some hurdles that must be overcome,” said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.
“If the U.S. and China fail to ink an agreement and there is no extension of the deadline and then we could see a return of risk off and we could see the return of global economic uncertainty dominating the sentiment of investors.”
The European Union and the United States announced a tariff deal on Sunday that will see most EU exports face a 15% tariff, nearly three months after Britain locked in a 10% baseline tariff rate.
However, investors pondered the downside of the U.S.-EU trade deal and the reality that punishing tariffs were here to stay, with unwelcome implications for growth and inflation. [MKTS/GLOB]
Gold is often used as a safe store of value during times of political and financial uncertainty.
Top U.S. and Chinese economic officials met in Stockholm on Monday for more than five hours of talks aimed at resolving longstanding economic disputes at the centre of a trade war between the world’s top two economies, seeking to extend a truce by three months.
Focus now shifts to the U.S. central bank’s two-day policy meeting beginning later in the day, with expectations that rates will be held steady, but traders will watch out for comments to gauge the timing of next Fed rate cut.
Spot silver fell 0.2% to $38.10 per ounce, while platinum rose 0.1% to $1,391.91 and palladium slipped 0.5% to $1,240.19.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
