Gold falls after US-Vietnam trade deal; US payroll data eyed

Gold prices declined on Thursday after a US-Vietnam trade deal eased tensions, while investors awaited the US payroll data later in the day for clues about the Federal Reserve’s policy path.

FUNDAMENTALS

* Spot gold lost 0.3% to USD 3,345.57 per ounce as of 0029 GMT, while US gold futures fell 0.1% to USD 3,356.60.

* The US will impose a lower-than-promised 20% tariff on various goods from Vietnam, President Donald Trump announced on Wednesday. The Southeast Asian nation is the US’s tenth-largest trading partner.

* Meanwhile, US and India negotiators pushed to finalise a tariff-reducing deal ahead of Trump’s July 9 deadline. However, disagreements around US dairy and agricultural exports remained unresolved, sources familiar with the talks said.

* Trump has indicated no signs of extending the negotiation deadline despite stalled discussions with Japan, another key trade partner, but expressed optimism about an India deal.

* Data released by ADP showed US private payrolls dropped by 33,000 jobs in June, marking the first decline in more than two years, as economic uncertainty hampered hiring. Meanwhile, low layoffs continued to anchor the labour market.

* Investors are now awaiting the non-farm payrolls report on Thursday, which is expected to show an addition of 110,000 jobs in June, down from 139,000 in May, according to a Reuters poll.

* The market currently anticipates a 66-basis-point rate cut by the Fed this year between September and December.

* Non-yielding gold tends to perform well during economic uncertainty and in a low-interest-rate environment.

* Meanwhile, Republicans in the House of Representatives struggled to pass Trump’s massive tax cut and spending bill as a handful of hardliners withheld support over concerns about its cost.

* Spot silver fell 0.6% to USD 36.36 per ounce, platinum lost 0.5% to USD 1,412.13 and palladium shed 0.4% to USD 1,150.28.

(Reporting by Anmol Choubey in Bengaluru; Editing by Sumana Nandy)