Gold nears 3-week lows. Is it a stronger dollar or progress in trade?

Gold prices held steady near three-week lows in Asian trade on Tuesday as a stronger dollar and easing global trade tensions curbed demand for the safe-haven metal while investors awaited a key U.S. Federal Reserve policy decision due this week.

Spot gold rose 0.2% to $3,319.25 an ounce, while gold futures also rose 0.2% to $3,374.70 an ounce by 01:12 ET (05:12 GMT).

The price of gold has fallen for the past four consecutive sessions as recent U.S. trade progress erodes demand for safe-haven assets.

Stronger dollar and US-EU deal dull gold’s shine

The dollar strengthened after the United States and the European Union reached a framework trade agreement on Sunday, reducing the threat of higher tariffs.

The US dollar index remained in positive territory after jumping more than 1% on Monday.

A stronger dollar makes gold more expensive for foreign buyers and tends to impact demand for the metal.

Analysts said the easing of trade tensions between the two major economies had reduced short-term appetite for safe-haven assets like gold.

Meanwhile, investors are eagerly awaiting the US Federal Reserve’s monetary policy meeting, which begins on Tuesday, with a decision expected on Wednesday. The central bank is expected to keep interest rates unchanged, although any signals about future monetary policy will be closely watched.

Caution ahead of the meeting kept gold prices in a narrow range, with traders reluctant to take large positions.

Market participants are also awaiting a series of US economic data releases later this week, including second-quarter GDP, PCE inflation data, a monthly employment report and more.

Metals markets fall; Chile seeks exemption from copper tariffs

Platinum futures fell 0.5% to $1,418.05 an ounce, while silver futures rose 0.2% to $38.313 an ounce.

Meanwhile, benchmark copper futures on the London Metal Exchange fell 0.3% to $9,778.45 a tonne, while U.S. copper futures fell 0.4% to $5.60 a pound.

US copper prices fell nearly 3% on Monday after Chile’s finance minister said the country would push for an exemption from a planned US tariff on the metal.

“The copper market awaits more details on the planned copper tariffs, which are due to come into effect on August 1,” ING analysts said.

“Traders are shipping record volumes of copper to the US to get ahead of tariffs. This has led to a record price gap between US copper prices and benchmark LME prices,” they added.