Gold rises on weaker dollar and U.S. trade uncertainty as global markets react to upcoming policy shifts. On Tuesday, spot gold climbed 0.7% to reach $3,325.79 per ounce. Meanwhile, U.S. gold futures increased 0.9%, hitting $3,337.30 per ounce.
The gold rally continued as the U.S. dollar index dropped to its lowest level in over three years. This decline made gold more affordable for buyers using other currencies. As a result, demand surged from international investors.
Additionally, concerns surrounding trade negotiations fueled market tension. U.S. President Donald Trump’s tariff deadline, set for July 9, added to the pressure. The pause in tariff hikes ends soon, increasing uncertainty in global trade talks.
Gold rises on weaker dollar and U.S. trade uncertainty, but interest rates also play a major role. Trump recently urged the Federal Reserve to slash interest rates. He even sent a note to Fed Chair Jerome Powell comparing U.S. rates with global peers. Trump argued that U.S. rates should align with Japan’s 0.5% and Denmark’s 1.75%.
This political pressure led investors to expect rate cuts sooner than anticipated. Goldman Sachs now forecasts three rate cuts this year, starting in September. Their earlier outlook included just one cut in December. The shift came as labor market data and minimal tariff impact shaped investor sentiment.
Lower interest rates typically support gold prices. They reduce the opportunity cost of holding non-yielding assets like gold. At the same time, the falling dollar boosts demand from foreign buyers.
Gold rises on weaker dollar and U.S. trade uncertainty, and this theme may dominate markets in the weeks ahead. Investors are also watching U.S. employment reports closely. The upcoming payroll data could influence both gold prices and rate expectations.
In related markets, silver remained flat at $36.07 per ounce. Platinum dipped 0.5% to $1,346.41, while palladium jumped 1.3% to $1,111.60.
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