Gold falls after US-Vietnam trade deal; US payroll data eyed

Synopsis

Gold prices dipped as U.S.-Vietnam trade de-escalation boosted market sentiment. Investors are keenly awaiting the U.S. payroll data for insights into the Federal Reserve's future policy decisions. The U.S. will impose a lower tariff on Vietnamese goods, while negotiations with India face hurdles over agricultural exports. U.S. private payrolls saw an unexpected decline, heightening anticipation for the non-farm payrolls report.

Gold prices declined on Thursday after a U.S.-Vietnam trade deal eased tensions, while investors awaited the U.S. payroll data later in the day for clues about the Federal Reserve's policy path.

FUNDAMENTALS

* Spot gold lost 0.3% to $3,345.57 per ounce as of 0029 GMT, while U.S. gold futures fell 0.1% to $3,356.60.

* The U.S. will impose a lower-than-promised 20% tariff on various goods from Vietnam, President Donald Trump announced on Wednesday. The Southeast Asian nation is the U.S.'s tenth-largest trading partner.

* Meanwhile, U.S. and India negotiators pushed to finalise a tariff-reducing deal ahead of Trump's July 9 deadline. However, disagreements around U.S. dairy and agricultural exports remained unresolved, sources familiar with the talks said.

* Trump has indicated no signs of extending the negotiation deadline despite stalled discussions with Japan, another key trade partner, but expressed optimism about an India deal.

* Data released by ADP showed U.S. private payrolls dropped by 33,000 jobs in June, marking the first decline in more than two years, as economic uncertainty hampered hiring. Meanwhile, low layoffs continued to anchor the labour market.

* Investors are now awaiting the non-farm payrolls report on Thursday, which is expected to show an addition of 110,000 jobs in June, down from 139,000 in May, according to a Reuters poll.

* The market currently anticipates a 66-basis-point rate cut by the Fed this year between September and December.

* Non-yielding gold tends to perform well during economic uncertainty and in a low-interest-rate environment.

* Meanwhile, Republicans in the House of Representatives struggled to pass Trump's massive tax cut and spending bill as a handful of hardliners withheld support over concerns about its cost.

* Spot silver fell 0.6% to $36.36 per ounce, platinum lost 0.5% to $1,412.13 and palladium shed 0.4% to $1,150.28. DATA/EVENTS (GMT) 0030 Japan JibunBK Comp Op, SVC PMI Final SA June 0145 China Caixin Services PMI June 0750 France HCOB Services, Composite PMI June 0755 Germany HCOB Services, Composite Final PMI June 0800 EU HCOB Services, Composite Final PMI June 0830 UK S&P GLOBAL PMI: COMPOSITE - OUTPUT June 0830 UK Reserve Assets Total June 1230 US Non-Farm Payrolls, Unemployment Rate, Average Earnings YY June 1230 US International Trade $ May 1230 US Initial Jobless Clm 28 June, w/e 1345 US S&P Global Comp, Svcs PMI Final June 1400 US Factory Orders MM May 1400 US ISM N-Mfg PMI June 1430 US EIA-Nat Gas Chg Bcf 27 June, w/e 1430 US Nat Gas-EIA Implied Flow 27 June.

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