Gold prices remain steady as markets await Fed, US trade moves

On Monday, Gold prices held ground as investors weighed dovish signals from the US Federal Reserve and the looming August 1 trade deadline set by President Donald Trump. The precious metal hovered near the $3,350 per ounce mark, amid markets jittery over tariff escalation and interest rate moves,

As per Reuters, spot gold was flat at $3,352.19 per ounce at 0250 GMT, while US gold futures held at $3,358.70. Traders are awaiting the Fed’s policy meeting next week as fresh rate cut cues may emerge, particularly as inflation remains uncertain under the current US trade strategy. “The dollar has made a subdued start to the week, which has left the door open for gold to post gains early doors with tariff deadlines looming large,” said Tim Waterer, Chief Market Analyst at KCM Trade, to Reuters. Waterer added that if no new deals emerge before the August 1 deadline, gold could aim for a renewed rally towards $3,400 or beyond.

Trump’s tariff and Powell succession in focus

The gold market has also been driven by diverging views within the Fed. Governor Christopher Waller last week backed a rate cut, echoing a dovish stance, as per Bloomberg. His colleague Michelle Bowman is also open to a reduction, though some policymakers reportedly remain cautious, fearing that Trump’s tariffs could trigger persistent inflation.

The Fed’s internal split coincides with growing pressure from President Trump. As the US President is reportedly weighing candidates to replace Fed Chair Jerome Powell when his term ends in May. As per Bloomberg, the White House has dismissed a Wall Street Journal report suggesting Treasury Secretary Scott Bessent warned Trump of adverse market reactions if Powell was removed.

Gold tends to benefit from lower interest rates, as it does not yield interest and becomes more attractive relative to bonds in a low-rate environment.

Trade talks and geopolitical tensions add to uncertainty

On the trade front, investors are keeping an eye on the negotiations between the US and the European Union closely. US Commerce Secretary Howard Lutnick has remained optimistic about a deal with Brussels. Meanwhile, Reuters reported that Trump may visit China ahead of the Asia-Pacific Economic Cooperation (APEC) summit later this year, or meet Xi Jinping on its sidelines.

In Asia, geopolitical jitters have risen after Japan’s ruling coalition lost control of the upper house in Sunday’s election, weakening Prime Minister Shigeru Ishiba’s domestic standing ahead of Trump’s trade ultimatum.

Precious metals remain range-bound

According to Reuters, gold has gained over 25 per cent this year, bolstered by central bank dovishness, US trade tensions, and safe-haven demand. Yet, price action remains within a narrow band as traders wait for clarity.

As of 0854 AM in Singapore, Bloomberg reported that spot gold was up slightly at $3,353.80 per ounce, while the Bloomberg Dollar Spot Index fell 0.1 per cent.

Silver inched up 0.1% to $38.22, platinum rose 0.3% to $1,425.11, and palladium gained 0.2% to $1,243.47, as per Reuters.

(With inputs from the agencies)