Gold Stumbles as US-Japan Trade Deal Ignites Risk-On Rally—Dollar Flexes Muscle

Safe-haven gold takes a hit as traders pivot to risk assets.

The US-Japan trade agreement sends markets scrambling—dollar surges, bullion retreats. Classic 'risk-on' behavior, but don't expect Wall Street to admit this rally's built on geopolitical duct tape.

Gold's dip proves even ancient stores of value aren't immune to modern trade theatrics. Meanwhile, forex markets cheer the dollar's dominance—until the next Fed pivot, of course.

Oil slipped for the 4th day straight

Oil prices also slipped for a 4th straight day as traders weighed progress in U.S. tariff discussions and prepared for stockpile figures due later in the session. Brent crude hovered near $68 per barrel, having been knocked back by concerns that trade disputes could curtail fuel demand.

Alongside the Japan deal, TRUMP announced an agreement with the Philippines. Yet the EU has warned it will impose 30 percent tariffs on U.S. goods worth several billion dollars if it fails to reach a trade accord with Washington.

Bessent noted that next week’s discussions in Stockholm may broaden to cover issues such as China’s purchases of oil from sanctioned exporters Iran and Russia. On the domestic front, the American Petroleum Institute reported a slight drop in U.S. crude inventories last week, while distillate stocks ROSE modestly. The Energy Information Administration’s official information is expected on Wednesday

Oil has traded within a narrow range this month after June’s volatility, when tensions between Iran and Israel drove sharp price swings. Brent crude remains down around 8 percent so far this year, as traders worry that renewed U.S. tariffs could dampen consumption just as OPEC+ nations look to boost output.

“We are racing toward the Aug. 1 deadline for reciprocal U.S. tariffs,” said Harry Tchilinguirian, head of research at Onyx Capital Group. “With the Japan deal in place, all eyes now turn to whether Europe can strike a swift agreement or retaliate with its own measures.”

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