Trump announced that the United States and the European Union reached a trade agreement to avoid imposing 50% tariffs on European products entering the United States.
With this announcement, market fears recede, and risk appetite increases, leading to a rise in Dow Jones contracts by more than 180 points, S&P 500 contracts by 0.23%, and Nasdaq contracts by 0.45%.
Meanwhile, the price of gold fell to $3,332 per ounce in spot contracts. Gold futures are recording $3,372 per ounce.
The deal includes a 15% tariff on European goods entering the United States, as President Donald Trump announced on Sunday while in Scotland.
The deal broadly includes large purchases from the European Union of U.S. energy and military equipment, along with substantial investments in the U.S. economy.
According to Trump, the European Union committed to purchasing energy from the United States worth $750 billion. He also stated that the European Union agreed to invest $600 billion in the United States.
'They agree to open their countries to trade with zero tariffs,' Trump told reporters. He added that the European Union will 'purchase a massive amount of military equipment' from the United States.
European Commission President Ursula von der Leyen confirmed that the agreement will include 15% tariffs across all levels, noting that this measure will help 'rebalance' trade between the two major trading partners.
This agreement could help calm the markets, which were apprehensive about the failure of both parties to reach an agreement before August 1, the scheduled date for Trump's comprehensive 'reciprocal' tariffs to take effect. The European Union was facing the prospect of imposing high tariffs of 30% and was pushing for a zero-for-zero agreement with the White House.
However, some questions remain regarding the details of the deal, especially concerning the tariffs on pharmaceutical products. Trump had threatened to impose high tariffs of up to 200% on medicines coming from the European Union, posing significant and potentially damaging obstacles to the major pharmaceutical industry in the region.
Neither Washington nor Brussels provided an immediate clarification regarding the status of these tariffs. Trump stated earlier on Sunday that imports of medicines into the United States are 'very special.'
Gold Price Forecast: A Short-Term Bearish Outlook
The technical breakdown on Friday below the 50-day moving average, combined with the fundamental headwinds, indicates a shift in the short-term outlook to bearish.
Gold may attempt to pivot near $3,310.480, but unless the Fed indicates a dovish policy next week, sellers are likely to remain in control. A retest of $3,282.660 and possibly $3,244.410 is expected if bearish momentum accelerates. The long-term outlook for gold remains constructive, supported by the 200-day moving average at $2,991.303, but near-term risks lean towards the bearish side.
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