Gold Falls as Trump Extends EU Tariff Deadline to July 9

Gold Falls Lower as Trump Extends EU Tariff Deadline

Gold prices dipped below $3,340 on Monday, partially unwinding the gains made on Friday after US President Donald Trump announced a postponement of the 50% tariffs on imports from the European Union (EU) until July 9. This decision followed a weekend phone call between Trump and European Commission President Ursula von der Leyen, signaling a potential easing in US-EU trade tensions and increasing hopes for a successful trade deal.

The markets reacted positively to the tariff delay, moving into a risk-on mode which reduced the immediate safe-haven demand for gold. However, the rally in gold is far from over. The precious metal continues to find support amid growing concerns about the fiscal health of the United States. Investors remain wary about the impact of Trump’s "One Big Beautiful Bill," recently passed by the House and headed to the Senate floor, which is expected to significantly increase the US federal deficit and debt levels.

Thus, while the easing of trade tensions has softened gold’s appeal temporarily, ongoing US debt worries maintain a robust baseline demand for gold as a safe haven asset. Traders will closely watch upcoming US economic data and Senate developments related to fiscal policy to gauge gold’s next move.