Stability of Gold Prices Amid Dollar Decline

SadaNews - Gold prices stabilized near a month-high as a wave of risk aversion returned among investors who are monitoring developments in trade negotiations ahead of the August 1 deadline set by U.S. President Donald Trump for imposing tariffs.

Spot gold was traded near $3,395 an ounce after closing up 1.4% in the previous session, with renewed concerns over Trump’s upcoming trade steps bolstering demand for safe assets.

White House spokeswoman Caroline Levitt said on Monday that the president could issue more unilateral tariff messages before August 1. The dollar recorded its worst daily performance in about a month, making gold cheaper for buyers worldwide.

Divergence in Fed Officials' Positions

Investors are also watching expectations for the interest rate trajectory ahead of the expected decision from the Federal Reserve next week.

Several Fed officials have recently expressed differing opinions on the impact of Trump’s tariff agenda on inflation, with Federal Reserve Chair Christopher Waller calling for a rate cut, while his colleagues appeared more cautious. Low borrowing costs are positive for gold as it does not yield interest.

Swap markets showed an almost negligible chance of a rate cut from the Fed next week. For the rest of the year, traders are betting on a total cut of 46 basis points, a level that has not changed much since Friday’s trading.

Geopolitical Risks Support Prices

Gold has risen over 25% since the beginning of the year as uncertainty escalates over Trump's aggressive attempts to reshape the global trading system, and ongoing disputes in Ukraine and the Middle East have driven investors to seek safe assets.

The precious metal has traded in a narrow range over the past months, despite ongoing global volatility.

Spot gold stood at $3,396.13 an ounce at 8:31 a.m. Singapore time. The "Bloomberg Spot Dollar Index" stabilized after a 0.5% loss in the previous session. Both silver and platinum remained stable, while palladium rose.