WASHINGTON (dpa-AFX) - Gold prices edged higher on Tuesday, with increasing Fed rate cut expectations fortified by soon-to-be announced Federal Reserve appointments as well as the ongoing US tariff war with some of its major trading partners.
Front Month Comex Gold for August delivery rose by $7.50 (or 0.22%) to $3,381.90 per troy ounce today.
Front Month Comex Silver for August delivery jumped by 49.50 cents (or 1.33%) to $37.687 per troy ounce today.
Data released by the Commerce Department today revealed that the US trade deficit narrowed to $60.2 billion in June 2025, the lowest since September 2023, compared to a revised $71.7 billion gap in May and forecasts of a $61.6 billion shortfall.
Imports declined 3.7% to $337.5 billion.
The ISM Services PMI unexpectedly fell to 50.1 in July from 50.8 in June.
A slowdown was seen for business activity/production (52.6 vs 54.2), new orders (50.3 vs 51.3) and inventories (51.8 vs 52.7).
Last week's data revealing poor performance of the economy and bad jobs data have reinforced the market bets that the US Fed cannot avoid cutting the lending rates in September and possibly again in December.
Looking to support this view, San Francisco Fed President Mary Daly stated yesterday that the time for rate cuts is nearing.
Last week's Labor Department report showed US nonfarm payrolls rose by a meagre 73,000 in July, well below forecasts. The unemployment rate ticked up to 4.2%.
US President Donald Trump today stated that he would 'shortly' announce his pick for an open seat on the Federal Reserve's Board which has become vacant due to the resignation of Adriana Kugler. Trump also hinted at a replacement of Fed Chair Jerome Powell.
As Trump had been pushing for lowering of lending rates, which the present Fed Chair had been resisting, it is anticipated that the new Chair appointed from among Trump's favorites could lean towards interest rate cuts.
With the suspension period for 'reciprocal tariffs' set by Trump ending last Friday, major US trading partners were hit with high tariffs - 35% for many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan, and 39% for Switzerland.
A low interest rate regime decreases the opportunity costs involved in holding non-yielding assets like gold, making bullion more attractive to investors.
Currently, intensifying tariff concerns and not-so-positive US economic data have been helping the precious metal on the upside.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News
