By Bas Kooijman, CEO and Asset Manager, DHF Capital S.A
July 25, 2025:
Gold extended its decline on Friday, falling for a third consecutive session as improving global risk sentiment and trade optimism weighed on safe-haven demand.
Progress in trade negotiations helped lift broader market sentiment. The US and European Union appear close to finalizing a deal that would introduce a 15% tariff on EU goods, mirroring the framework already established with Japan. This development pressured gold as investors rotated into riskier assets.
On the macro front, US jobless claims declined for a sixth straight week. The data reinforced the view that the labor market remains resilient, supporting expectations that the Federal Reserve could leave interest rates unchanged next week. A more cautious approach from the Fed could further pressure the bullion.
Additionally, physical demand remained soft. Indian and Chinese dealers offered steeper discounts this week as elevated gold prices discouraged retail buying. Jewellers in key hubs reported limited orders and cautious sentiment amid volatile price action.
Still, geopolitical risks continue to underpin gold. Russia and Ukraine exchanged drone strikes just hours after their latest ceasefire talks ended without progress. In the Middle East, ceasefire negotiations collapsed as the US and Israel withdrew from talks in Qatar, adding another layer of uncertainty and prolonging the geopolitical tensions.