Spot gold was down 0.6% at $3,367.72 per ounce. U.S. gold futures settled 0.7% lower at $3,373.5.
The market is optimistic about trade deals — first between the U.S. and Japan, and now possibly between the U.S. and the European Union, said Aakash Doshi of State Street Investment Management, adding that strong equities and low volatility have weighed on gold’s upside.
The U.S. and EU were making progress toward a trade deal that may include a 15% baseline U.S. tariff on EU goods, with potential exemptions. The move comes shortly after Washington unveiled a separate agreement with Japan.
Meanwhile, U.S. President Donald Trump’s surprise move to visit the Federal Reserve later Thursday added a layer of uncertainty to the policy outlook. It comes amid Trump’s repeated criticism of Fed Chair Jerome Powell for not cutting interest rates more aggressively.
“Any potential interference with Fed independence is supportive for gold over the medium- to long term,” Doshi said.
The Fed is widely expected to leave rates unchanged at its July 29–30 meeting, but markets continue to price in a potential fed funds rate cut from their current 4.25%-4.50% in September.
A safe-haven asset during times of economic uncertainties, gold also tends to do well in a low-interest rate environment.
On the data front, U.S. jobless claims unexpectedly fell last week, signaling a steady labor market despite sluggish hiring making it harder for the unemployed to find work.
Spot silver slipped 0.7% to $39.02 per ounce, palladium dropped 3.3% to $1,235.93 and platinum lost 0.4% to $1,405.90.