Kuala lumpur: The gold futures contract on Bursa Malaysia Derivatives retreated to close lower on Thursday, as the market believes trade tensions are easing, according to an analyst.

According to BERNAMA News Agency, SPI Asset Management managing partner Stephen Innes stated that the recent United States-Japan trade deal, along with indications of a potential agreement between the US and the European Union, suggests that the threat of escalating trade wars is diminishing.

Innes noted, "Gold traders are taking notice. The fear premium that helped fuel recent rallies is deflating. In a world where US President Donald Trump is striking deals rather than stoking disputes, gold loses a key pillar of support."

He further observed that gold is declining even with a weakening US dollar. At the close, the spot-month July 2025 contract slipped to US$3,366.8 per troy ounce from US$3,442.2 per troy ounce on Wednesday. The August 2025 contract decreased to US$3,385.1 per troy ounce from US$3,460.5, and the September 2025 contract declined to US$3,391.0 per troy ounce from US$3,466.4.

The October 2025, December 2025, and February 2026 contracts also settled lower at US$3,420.3 per troy ounce from US$3,495.6 previously. Trading volume increased slightly to 31 lots from 30 lots, while open interest rose to 74 contracts from 58.

Physical gold was priced at US$3,430.15 per troy ounce based on the London Bullion Market Association's afternoon fix on July 23, 2025.