Gold Edges Up on Weak US Dollar, Political Uncertainty

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. - Reuters
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. - Reuters
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Gold Edges Up on Weak US Dollar, Political Uncertainty

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. - Reuters
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. - Reuters

Gold prices edged higher on Wednesday, aided by a weaker US dollar and political uncertainty following the latest import tariffs announced by US President Donald Trump.

Spot gold firmed 0.1% $2,918.83 an ounce as of 0955 GMT after rising nearly 1% on Tuesday. Prices hit a record high of $2,956.15 on February 24 and have gained 11% so far this year.

US gold futures rose 0.3% to $2,929.70.

"Uncertainty is food and water for gold and hence the bias on prices is to the upside," independent analyst Ross Norman said, Reuters reported.

"Gold looks content to consolidate after recent gains, but with one eye firmly on the $3,000 level."

The dollar index dropped to a three-month low, making bullion more appealing to other currency holders.

In an address to Congress, Trump said further tariffs would follow on April 2, including "reciprocal tariffs" and non-tariff actions aimed at balancing out years of trade imbalances. This came just after he followed through on new 25% tariffs on imports from Mexico and Canada that took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%.

Meanwhile, top bullion consumer China unlocked more fiscal stimulus, promising greater efforts to support consumption and cushion the impact of an escalating trade war with the United States.

Markets now await the ADP employment report due at 1315 GMT and US nonfarm payrolls on Friday for cues on the US interest rate trajectory.

"Geopolitical events and tariffs are currently overshadowing economic data... Significant deviations from market expectations would be needed to create meaningful movement, and any reaction to this week’s ADP and payrolls data is likely to be short-lived," said Zain Vawda, market analyst at MarketPulse by OANDA.

Spot silver advanced 1% to $32.32 an ounce, platinum gained 1% to $970.20, and palladium added 1% to $951.50.



Gold Gains over 1% as Dollar, Yields Ease; Spotlight on Trade

A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
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Gold Gains over 1% as Dollar, Yields Ease; Spotlight on Trade

A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo

Gold prices gained over 1% on Monday as the dollar and US bond yields weakened amid uncertainty over trade talks ahead of a US deadline of August 1 for countries to strike deals or face more tariffs.

Spot gold was up 1.2% at $3,390.79 per ounce at 9:52 ET (1352 GMT). US gold futures were up 1.3% to $3,402.40.

The US dollar index was down 0.4%, making dollar-denominated gold more affordable for buyers using other currencies, while benchmark 10-year U.S. Treasury yields hit a more than one-week low, Reuters reported.

"With the August 1st deadline looming, it brings a level of uncertainty to the market and that certainly is supportive," said David Meger, director of metals trading at High Ridge Futures.

The European Union is exploring a broader set of possible counter-measures against the US as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

On the interest rate front, traders are pricing about a 63% chance of a rate cut in September, according to the CME FedWatch Tool.

U.S. Treasury Secretary Scott Bessent said the entire Federal Reserve needed to be examined as an institution and whether it had been successful.

Talk of earlier than expected U.S. rate cuts is building, with speculation around a possible replacement of Fed Chair Jerome Powell and reshaping of the Fed adding to market jitters, Meger said.

Gold is considered a hedge against uncertainty and tends to perform well in a low interest rate environment.

Data showed that the world's leading gold consumer, China, brought in 63 metric tons of the precious metal last month, the lowest amount since January. Its imports of platinum in June fell 6.1% from the prior month.

Spot silver gained 1.8% to $38.86 per ounce, platinum rose 2.2% to $1,453.17 and palladium was 3.5% higher at $1,284.46.