Gold prices are holding near their highest level in a month, buoyed by renewed risk-off sentiment among investors closely monitoring trade negotiations ahead of US President Donald Trump’s August 1 tariff deadline. Bullion traded near $US3395 an ounce, after a 1.4 per cent gain in the previous session, driven by concerns over potential trade escalations that have reignited demand for safe-haven assets. White House press secretary Karoline Leavitt indicated that the president may issue further unilateral tariff measures before the deadline.
The US dollar experienced its worst day in nearly a month, making gold more affordable for buyers holding other currencies. Investors are also assessing the outlook for the Federal Reserve’s interest rate policy in anticipation of next week’s policy decision. Recent comments from Fed officials reveal differing perspectives on the inflationary impact of Trump’s tariff agenda, with Fed governor Christopher Waller suggesting a rate cut, while most colleagues remain cautious. Lower borrowing costs often boost gold’s appeal, as it does not provide interest income.
Swaps markets indicate a very low probability of a Fed rate cut next week. However, traders are pricing in a total of 46 basis points of easing by the end of the year, a level that remains relatively unchanged from Friday. Gold has risen by more than a quarter this year, supported by uncertainties surrounding Trump’s trade policies and ongoing conflicts in Ukraine and the Middle East, prompting investors to seek refuge in safe-haven assets. However, the precious metal has traded in a narrow range in recent months.
