Gold Slips as Dollar Strengthens, Investors Eye Tariff Deadline and Fed Signals
Gold prices retreated on Monday, slipping to their lowest level in nearly a week as a firmer U.S. dollar dampened demand for the precious metal. Meanwhile, markets remain focused on the looming U.S. tariff deadline and upcoming Federal Reserve signals.
By late morning in London (1148 GMT), spot gold had fallen 0.9% to $3,303.93 per ounce, while U.S. gold futures dropped to $3,313.10, also down 0.9%.
The dollar index edged up 0.2%, supported by recent strong economic data, which makes gold less attractive to non-dollar investors by increasing its relative cost.
“Gold is seeing a modest pullback as the dollar finds some near-term strength, largely because U.S. economic data remains robust, which diminishes the urgency for the Fed to cut rates,” explained Nitesh Shah, commodities strategist at WisdomTree.
Strong U.S. Jobs, Fed Outlook in Focus
The latest data indicated a stronger-than-expected rise in U.S. employment for June, raising concerns that inflation linked to tariffs might delay aggressive Fed rate reductions. Investors are waiting for the Fed’s meeting minutes, due later this week, to clarify the central bank’s policy trajectory.
Tariff Deadline Looms as Trade Tensions Simmer
Trade developments also weighed on sentiment. Over the weekend, President Donald Trump said the U.S. was close to finalizing several trade agreements and would inform trading partners of higher tariff rates by July 9, with implementation slated for August 1.
The original tariff plan, announced in April, included a 10% base rate on most imports, with “reciprocal” rates as high as 50%. Trump also reiterated his threat of an additional 10% levy on countries he accused of aligning with “anti-American” policies of the BRICS bloc.
“The window of lower tariffs is closing fast, and no remarkable trade deals have been achieved,” Shah noted. “This suggests net trade may contract over the course of the year, which could eventually lend support to gold despite the current weakness.”
Broader Precious Metals Slide
Other precious metals followed gold lower:
- Spot silver fell 1.9% to $36.22 per ounce.
- Platinum dropped 2.4% to $1,358.17.
- Palladium slipped 1.7% to $1,115.38.
For now, gold remains under pressure as the dollar holds its ground, but analysts caution that rising trade tensions and lingering economic uncertainty could rekindle safe-haven demand in the weeks ahead.
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