Gold rises on weaker US dollar as markets await Fed rate-cut clues

Gold prices rose on Tuesday (Jul 1), supported by a weaker US dollar, as investors awaited labour market data due later this week to assess the Federal Reserve’s potential rate-cut trajectory amid renewed calls from US President Donald Trump to lower rates.

Spot gold was up 0.3 per cent at US$3,312.25 per ounce, as at 0042 GMT, while US gold futures rose 0.5 per cent to US$3,323.10.

The US dollar index fell 0.2 per cent, hovering near a three-year low, making bullion more affordable for holders of other currencies.

Trump continued to press the Fed on Monday to ease monetary policy, sending Fed chair Jerome Powell a list of global central bank interest rates, annotated with handwritten comments urging US rates to align with Japan’s 0.5 per cent and Denmark’s 1.75 per cent.

US Treasury Secretary Scott Bessent said on Monday that the administration is considering using the next expected Federal Reserve Board of Governors vacancy in early 2026 to appoint a successor to Powell.

Federal Reserve Bank of Atlanta president Raphael Bostic said on Monday that the economy has yet to face the full impact of Trump’s trade tariffs and reiterated that he expects one rate cut from the Fed this year.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Meanwhile, Chicago Federal Reserve Bank president Austan Goolsbee said he sees no signs of stagflation but noted the possibility of both unemployment and inflation worsening simultaneously.

Investors are closely monitoring a series of labour market reports in this holiday-shortened trading week, culminating in Thursday’s government payrolls data, for insights into the Fed’s monetary policy direction.

Meanwhile, Trump expressed frustration with US-Japan trade negotiations on Monday as Bessent warned that countries could be notified of sharply higher tariffs, as a Jul 9 deadline approaches despite good-faith negotiations.

The United States will resume trade negotiations with Canada after Ottawa dropped the digital services tax.

Spot silver edged up 0.1 per cent to US$36.13 per ounce, platinum rose 0.7 per cent to US$1,362.35, while palladium gained 1.2 per cent to US$1,110.03. REUTERS