Gold prices rose in the European market on Monday, continuing to move in positive territory for the second consecutive day, supported by the decline in US dollar levels in the foreign exchange market.
Investors are closely monitoring developments in US trade talks, awaiting any potential catalysts that could move the market—including further signals about US interest rate cuts in the second half of this year.
The Price
• Gold prices today: Gold rose by 0.65% to ($3,370.84), from the opening level of ($3,349.84), after recording a low of ($3,345.13).
• At Friday’s settlement, gold prices rose by 0.35%, marking the second gain in the past three days, as the upward momentum in the US dollar paused.
• Last week, gold lost about 0.2%, marking its first weekly decline in the past three weeks, due to a correction and profit-taking from a three-week high of $3,377.47 per ounce.
The US Dollar
The US Dollar Index fell by 0.3% on Monday, extending losses for the second consecutive session and moving away from a three-week high, reflecting continued weakness in the dollar against a basket of major and minor currencies.
Aside from profit-taking, the dollar is weakening following comments from several Federal Reserve officials about the potential for a rate cut in July.
Federal Reserve Governor Christopher Waller stated on Friday that he favors a rate cut at the July meeting, believing that tariffs are likely to have only a limited impact on inflation.
Waller added that the underlying data “do not indicate a healthy labor market in the private sector,” and that the Federal Reserve “should act in advance” of any potential employment slowdown.
His comments came amid near-daily criticism from US President Donald Trump of Fed Chair Jerome Powell for hesitating to cut interest rates.
US Interest Rates
• Following Waller’s comments and according to the CME Group’s FedWatch tool: the pricing of a 25 basis point US rate cut in the July meeting rose from 2% to 5%, while the probability of keeping rates unchanged fell from 98% to 95%.
• The probability of a 25 basis point rate cut in the September meeting rose from 58% to 62%, while the probability of no change declined from 42% to 38%.
• To gain further clarity on the US interest rate outlook for this year, investors are awaiting comments from Fed Chair Jerome Powell on Tuesday, along with a series of key US economic data releases.
Outlook on Gold Performance
• Tim Waterer, Chief Market Analyst at KCM Trade, said: “The dollar started the week on a soft note, giving gold a chance to make early gains as the tariff deadline approaches.”
• Waterer added: “The closer we get to the critical August 1 deadline without any new trade deals, the more likely gold will try to rally toward the $3,400 level—or even higher.”
SPDR Fund
Holdings at SPDRGold Trust—the world’s largest gold-backed exchange-traded fund—fell by about 4.87 metric tons on Friday, marking the second consecutive daily decline, bringing the total down to 943.63 metric tons, the lowest level since June 16.
