PRECIOUS-Gold falls on firmer US dollar and rising trade optimism

By Anmol Choubey

July 25 (Reuters) - Gold prices fell on Friday, pressured by a recovery in the U.S. dollar and optimism over progress in trade talks between the United States and the European Union.

Spot gold XAU= was down 0.7% at $3,343.0 per ounce by 1150 GMT. U.S. gold futures GCcv1 fell 0.9% to $3,344.50.

The U.S. dollar index .DXY rebounded from its lowest in more than two weeks, making bullion more expensive for overseas buyers, while benchmark 10-year U.S. Treasury yields US10YT=RR rose. USD/US/

A resurgence in risk appetite driven by optimism over potential tariff negotiations, and lower-than-expected U.S. jobless claims reinforcing the view that the Federal Reserve is unlikely to cut rates, are pressuring gold, said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. MKTS/GLOB

The European Commission said on Thursday that a negotiated trade solution with the U.S. is within reach - while EU members voted to approve counter-tariffs on 93 billion euros ($109 billion) of U.S. goods in case the talks collapse.

Data showed the number of Americans filing new applications for jobless benefits fell to a three-month low last week, indicating stable labour market conditions.

President Donald Trump pressed Fed Chair Jerome Powell to lower interest rates in a tense visit to the U.S. central bank on Thursday.

Markets are pricing in a potential rate cut in September. FEDWATCH

Gold typically performs well in times of uncertainty and in low-interest-rate environments.

"Central bank buying can continue to hold the floor for gold, but a reignition of ETF inflows is needed for prices to break out higher once again towards our bullish year-end target of $3,675/oz, which likely also requires Fed cuts exceeding market expectations," analysts at JP Morgan said in a note.

Spot silver XAG= fell 0.9% to $38.74 per ounce, but was still on track for a weekly gain of about 1.6%. Platinum XPT= was 1.7% lower at $1,384.95, with palladium XPD= also down 1.8% at $1,201.75, its lowest in over a week.

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