XAU/USD: Gold Prices Hit $3,350 in Steep Three-Day Drift — What’s Weighing on Bullion?

Is the rally losing shine? Gravity check for gold bulls comes as traders load up on risk amid a robust earnings season. Also, trade optimism.

🤔 Safe-Haven Demand Fades

• Gold prices XAUUSD edged lower to $3,350 Friday morning, marking a steep 2.4% drop in three days in a row as traders shifted into risk assets on the back of improving trade sentiment and a blockbuster earnings season.
• Signs of a budding US-EU trade deal, similar to Washington’s recent agreement with Japan, dented demand for safe-haven assets like the yellow metal. According to EU diplomats, the proposed pact would impose a broad 15% tariff — far more acceptable than the 30% previously floated.
• Risk-on sentiment surged, with the S&P 500 and Nasdaq both closing at record highs this week, making gold’s appeal as a hedge a bit less shiny for now.

🌱 Trade Optimism Rises

• Progress in US trade talks with key partners has cooled fears of an all-out tariff escalation. That’s good news for equities — but bad news for gold, which thrives on uncertainty and market jitters.
• A broad deal with the EU would ease pressure on global supply chains and reduce recession risk, further undercutting gold’s defensive narrative.
• Still, the dollar remained relatively weak, limiting bullion’s losses — the EURUSD pair held steady Friday morning after the ECB held rates at 2% on Thursday.

👀 Markets Eye September Cut

• Across the Atlantic, the Federal Reserve is widely expected to hold rates steady at its July 29–30 meeting, offering little new juice for gold traders in the short term.
• But with markets still pricing in a potential rate cut in September, the broader outlook remains supportive — lower rates typically make non-yielding assets like gold more attractive.
• Presently, though, earnings optimism and easing geopolitical tensions are winning out. The gold rally isn’t over — but it’s taking a breather while equities hog the spotlight.