Gold prices rose in the European market on Tuesday after holding above the $3,300 per ounce barrier, supported by the current decline in U.S. dollar levels in the foreign exchange market.
President Donald Trump began informing his trade partners that the elevated tariffs will begin on August 1, marking a new phase in the trade war he launched earlier this year.
The Price
Gold prices today: Gold rose by 0.35% to ($3,345.84), from the opening level of ($3,336.72), with a session low at ($3,330.70).
At Monday’s settlement, gold prices were little changed after briefly touching a one-week low at $3,297 per ounce earlier in the session.
U.S. Dollar
The dollar index fell on Tuesday by 0.35%, retreating from a two-week high at 97.67 points, reflecting renewed weakness in the U.S. currency against a basket of major and minor currencies.
Aside from profit-taking, dollar levels are also falling amid renewed recession fears in the United States, after President Donald Trump announced 25% tariffs on goods imported from Japan and South Korea, in the latest development of his chaotic trade war.
Trump has begun informing his trade partners — from major suppliers like Japan and South Korea to smaller nations — that sharply higher U.S. tariffs will begin on August 1, later stating he is open to an extension if countries present proposals.
U.S. Interest Rates
According to the CME Group’s FedWatch tool: The probability of a 25-basis-point rate cut in the July meeting is currently priced at 5%, while the probability of rates remaining unchanged stands at 95%.
The probability of a 25-basis-point rate cut in the September meeting is currently priced at 62%, with a 38% probability of no change in interest rates.
To reassess these probabilities, investors are closely watching the minutes of the Federal Reserve’s latest policy meeting, due for release tomorrow, Wednesday.
Gold Outlook
Tim Waterer, Chief Market Analyst at KCM Trade, said: “Trump’s latest tariff rhetoric keeps gold in focus as a hedge against uncertainty, but the strength of the U.S. dollar and rising bond yields are limiting its immediate upside.”
Waterer added: “Traders appear relatively unfazed by Trump’s tariff talk, and with safe-haven demand largely contained at this stage, gold is still waiting for the right moment in anticipation of a potential breakout.”
SPDR Fund
Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged yesterday for the third consecutive day, with total holdings at 947.66 metric tons, the lowest level since June 18.
