Gold prices increased on Tuesday as the US dollar weakened and increased uncertainty about US President Donald Trump's trade deals before the deadline of July 9, thereby boosting demand for gold. Expectations of the US Federal Reserve (FED) cutting interest rates also further supported the price of precious metals.
Spot gold rose 0.7% to $3,325.79/ounce as of 5:21 a.m. GMT, while US gold futures added 0.9% to $3,337.3/ounce.
A weaker US dollar and concerns about the impact of Trumps failure to extend the deadline are supporting gold prices at the moment, said Nicholas Frappell, global director of held market segment at ABC Refinery.
The US dollar index (.DXY) has fallen to its lowest level in more than three years, making gold cheaper for holders of other currencies.
Trump expressed his disappointment with the US-Japan trade talks on Monday, while Finance Secretary Scott Bessent warned that countries could face much higher tariffs.
The tax rates, announced on April 2, are expected to take effect from July 9 after a 30-day postponement by Trump to create time for bilateral negotiations.
Meanwhile, Mr. Trump continued to increase pressure to call for a rate cut, when he sent Fed Chairman Jerome Powell a list of interest rates of major central banks in the world with a handwritten note saying that US interest rates should be between 0.5% for Japan and 1.75% for Denmark.
The call for a rate cut is also affecting the market, although I was a bit surprised that the market is so optimistic about the possibility of a rate cut, Frappell added.
Low interest rates make gold more attractive by reducing holding costs.
Goldman Sachs now expects the Fed to cut rates three times this year, starting in September, up from the previous forecast of just one in December, citing the impact of tariffs at the minimum level and a weakening labor market.
Investors are closely monitoring US employment reports for this short holiday trading week, with government salary table data due on Thursday.
Spot silver prices remained unchanged at 36.07 USD/ounce. platinum prices fell 0.5% to $1,346.41, while gold prices rose 1.3% to $1,111.6 an ounce.
See more news related to gold prices HERE...
