FX.co ★ Gold Falls as Geopolitical Risks Ease

Gold prices declined to approximately $3,330 per ounce on Wednesday, erasing more than 1% of the gains achieved in the previous session. This dip was attributed to a reduction in geopolitical tensions, which lessened the metal's safe-haven allure. On Tuesday, President Trump announced that Israel had agreed to a 60-day ceasefire in Gaza and cautioned Hamas to accept this agreement before conditions deteriorate further. Concurrently, a weaker US dollar provided some support against further losses due to ongoing fiscal concerns and trade uncertainties. The Senate approved Trump’s comprehensive tax-and-spending legislation, which now returns to the House and is anticipated to increase the national debt by $3.3 trillion. Furthermore, Trump conveyed dissatisfaction with the current US-Japan trade negotiations, suggesting the potential imposition of a 35% tariff on Japanese imports. From a monetary policy perspective, Federal Reserve Chair Jerome Powell stated that the Fed remains cautious regarding interest rate cuts, though a reduction within the month has not been ruled out. Meanwhile, Treasury Secretary Bessent anticipates rate cuts by September. Investors are now turning their attention to critical US labor statistics due this holiday-shortened week, with particular emphasis on Thursday's payroll report for further insights into the Fed's future policy direction.