A lower US dollar supported gold prices on Monday as investors sought clarification on trade developments ahead of the US tariff deadline of August 1. By 0751 GMT, spot gold was up 0.5% at $3,365.49 an ounce. US gold futures increased to $3,373.20, up 0.5%.
A declining value of the US dollar provides the slight assistance. The market will be watching to see if trade agreements are announced or if tariffs are imposed as the tariff deadline of August 1 draws near, according to Giovanni Staunovo, a commodity analyst at UBS. Gold became more affordable for holders when the dollar depreciated by 0.2% compared to a basket of other major currencies.
Although August 1 is a firm deadline for tariffs to go into effect, U.S. Commerce Secretary Howard Lutnick stated on Sunday that he was optimistic the United States could reach a trade agreement with the European Union.
Gold often performs well in an environment with low interest rates and is frequently seen as a safe-haven asset during difficult economic times. Following its decision to keep interest rates unchanged last month, the US Federal Reserve will convene its next policy meeting on July 29–30.
Strong economic indicators and high inflation forecasts are influencing the number of rate cuts the Fed is expected to make this year. The buy-on-dip strategy is still in effect, safeguarding gold prices from negative concerns, according to a report from ANZ analysts.
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