WASHINGTON (dpa-AFX) - Gold prices rallied on Monday as the uncertainty surrounding trade deals is still looming, with an August 1st deadline just around the corner, and a subdued US dollar value due to last week's positive economic data. The precious metal had fallen back last week on temporary US dollar strength.
Front Month Comex Gold for July delivery rose by $48.90 (or 1.46%) to $3,401.90 per troy ounce today.
Front Month Comex Silver for July delivery, gained by 87.80 (or 2.30%) to $39.101 per troy ounce today.
While investors are eager to see an interest rate cut, the Federal Reserve is not keen on a downward revision anytime soon, as last week's jobs and retail sales data has shown a resilient economy despite the tariff war going on since February.
President Donald Trump is interested in a low-interest regime and has expressed his displeasure with the Fed in this regard explicitly and stated that he wanted Fed Chair Jerome Powell to be replaced. Powell's term as Chair concludes in May 2026.
In the recent days, Trump has criticized the $2.5 billion renovation of the Fed's Washington headquarters, which he says has exceeded the budget, suggesting fraud may be involved.
Today, US Treasury Secretary Scott Bessent stated that the entire Federal Reserve needed to be examined as an institution to assess its success.
Though the ceasefire of the 12-day Israel-Iran war announced by Trump holds, Israel struck Yemen's Port of Hodeida in retaliation for a series of missile launched by rebels on Israeli targets last week.
Two weeks before, the Iranian-militia backed Houthi's had attacked and drowned two cargo bulk carriers - MV Magic Seas and MV Eternity C - in the Red Sea. The Israeli Defence Minister Katz asserted that 'Yemen's fate will be the same as Tehran's.'
US Dollar has started to exhibit some signs of relative weakness, apparently on the prospects of interest rate cuts.
Major economic powers trading with the US are working hard to find a 'good trade deal' with the US as the 'reciprocal tariff' suspension period ends on August 1.
Senior level officials have been engaging in serious negotiations to do away with the excessive tariffs that Trump has proposed.
US Commerce Secretary Howard Lutnick called August 1st a 'hard deadline' for countries to start paying tariffs but added that 'nothing stops countries from talking to us after August 1st.'
The direction that gold prices may take in the second half of this year could be driven by Fed rate cuts, final US tariffs, and the geopolitical tensions.
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