Gold Rallies to Five-Week Peak as Dollar and Yields Slip; Trade Tensions Take Center Stage
Gold surged more than 1% on Monday, climbing to its highest level in over a month, as a weakening US dollar and lower Treasury yields boosted demand for the safe-haven metal. Investors also kept a wary eye on global trade tensions ahead of a critical US deadline.
By 2:34 p.m. ET (1834 GMT), spot gold was up 1.3% at $3,394.23 per ounce, marking its strongest showing since June 17. Meanwhile, US gold futures settled 1.4% higher at $3,406.40.
The US dollar index slipped 0.6%, making gold more attractive to buyers using other currencies. At the same time, yields on benchmark 10-year US Treasuries fell to their lowest in more than a week—further bolstering the appeal of the non-yielding metal.
“With the August 1st deadline looming, it injects a significant dose of uncertainty into the market, and gold is benefitting from that,” said David Meger, director of metals trading at High Ridge Futures.
Trade Disputes and Policy Turmoil Fuel Investor Anxiety
Global trade tensions remained front and center as Washington’s August 1 deadline for new trade deals approached. Countries failing to secure agreements face the threat of additional US tariffs. Meanwhile, the European Union is reportedly preparing a wider array of countermeasures amid dimming hopes of an amicable resolution, EU diplomats said.
On the monetary policy side, market expectations for a Federal Reserve rate cut in September are rising, with the CME FedWatch Tool showing a roughly 59% probability. Speculation over potential changes at the Fed—including replacing Chair Jerome Powell—has added another layer of unease.
“The growing chatter around reshaping the Fed and possibly removing Powell is fueling uncertainty, and that plays into gold’s traditional role as a hedge,” Meger added.
Gold typically performs well in times of uncertainty and when interest rates are low, as it offers a store of value without relying on yield.
Mixed Data From China as Other Metals Gain
On the demand side, new data showed China imported 63 metric tons of gold last month, its lowest monthly total since January. Platinum imports also dipped 6.1% from May levels, highlighting some softness in demand from the world’s top consumer of precious metals.
Elsewhere in the metals complex, spot silver posted strong gains, climbing 2.1% to $38.99 per ounce. Platinum rose 1.4% to $1,440.75, while palladium advanced 2.1% to $1,266.04.
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