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Trump says US nears trade deals with several countries

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Higher US tariffs to kick in from Aug. 1

(Updates for Asia morning hours)

By Anmol Choubey

July 7 (Reuters) - Gold prices dropped on Monday after

U.S. President Donald Trump signalled progress on multiple trade

agreements and announced extended tariff reprieves for several

countries, dampening demand for the safe-haven metal.

Spot gold fell 0.6% to $3,314.21 per ounce by 0232

GMT. U.S. gold futures were down 0.6% to $3,322.

The U.S. is close to finalising several trade agreements in

the coming days and will notify other countries of higher tariff

rates by July 9, Trump said on Sunday, with the higher rates

scheduled to take effect on Aug. 1.

Trump announced in April a 10% base tariff on most

countries, with additional duties of up to 50%. He later

postponed the effective date for all but 10% of those tariffs

until July 9. The new date grants a three-week reprieve to most

affected nations.

"This short-term reprieve (by the U.S.) is causing this

intraday weakness in the gold price right now," OANDA senior

market analyst Kelvin Wong said.

"What I foresee will be another round of so-called trophy

price movement at around the $3,320 level, then we have the top

side coming in at $3,360, short-term resistance."

Concerns of tariff-driven inflation have led to expectations

of slower rate cuts from the Federal Reserve. Rate futures show

traders no longer expect a Fed rate cut this month and are

pricing in a total of just two quarter-point reductions by the

year-end.

Last week, Trump signed into law a massive package of tax

and spending cuts at the White House, which as per nonpartisan

analysis will add more than $3 trillion to the country's $36.2

trillion debt.

Spot silver fell 0.8% to $36.81 per ounce, platinum

shed 0.8% to $1,380.55 and palladium lost 1% at

$1,123.31.

(Reporting by Anmol Choubey in Bengaluru; Editing by Sherry

Jacob-Phillips and Subhranshu Sahu)