JAKARTA (TimesofIDN) – Global gold prices came under significant pressure this week, declining for three consecutive days and falling below the psychological threshold of US$3,400 per troy ounce. According to Refinitiv data, gold closed at US$3,335.93 on Friday (25/7/2025), down 0.95% in a single day.
This marked the lowest closing level since July 15, 2025, with a weekly decline of 0.4%, steeper than the 0.19% drop recorded the previous week.
This three-day consecutive decline is a rare occurrence in 2025, having happened only five times this year, with the most recent episode occurring between May 23-25, 2025. Similar downturns were also recorded in late April, early April, and March.
The downward pressure on gold prices was driven by a stronger U.S. dollar and signs of progress in trade negotiations between the U.S. and the European Union, reducing demand for safe-haven assets like gold. The U.S. dollar index (DXY) closed at 97.65, its strongest level in four days. A rising dollar makes gold bullion more expensive for foreign buyers, as gold purchases are denominated in U.S. dollars.
As reported by Reuters, Peter Grant, vice president and senior metals analyst at Zaner Metals, said, “The deal with Japan was quite significant, and there’s optimism about reaching a U.S.-EU agreement before the August 1 deadline. This has weakened safe-haven demand as heightened risk appetite drives capital toward riskier assets.”
Following the U.S.-Japan trade agreement this week, the European Commission indicated that a trade deal with the U.S. is within reach. However, EU member states have approved retaliatory tariffs on U.S. goods should negotiations falter.
On the economic front, U.S. weekly unemployment claims dropped to a three-month low, signaling a stable labor market despite slower hiring.
This stability is expected to allow the Federal Reserve (The Fed) to maintain interest rates at 4.25%-4.50% in its upcoming meeting, even as inflation shows signs of rising due to import tariffs imposed by U.S. President Donald Trump.
Trump’s surprise visit to the central bank underscored renewed efforts to pressure Fed Chairman Jerome Powell to cut interest rates aggressively.
Grant noted, “Gold may see buying interest around US$3,300, but it’s unlikely to break new record highs before The Fed’s decision is announced.”
Historically, gold tends to perform well during periods of economic uncertainty and low interest rates.
