Weaker US dollar, bond yields lift gold to more than five-week high

Gold prices climbed to a more than five-week peak on Wednesday (Jul 23), supported by a softer US dollar and lower Treasury yields as investors looked forward to signs of progress in US trade discussions.

Spot gold was steady at US$3,430.19 per ounce, as at 0051 GMT, after hitting its highest since Jun 16 earlier in the session. US gold futures were flat at US$3,443.30.

The US dollar index languished near a two-week low against its rivals, making greenback-priced gold less expensive for other currency holders.

Benchmark 10-year US Treasury yields on Tuesday touched their lowest level since Jul 9.

US President Donald Trump said the US and Japan had struck a trade deal that includes a 15 per cent tariff that will be levied on US imports from the country.

US and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal, US Treasury Secretary Scott Bessent said.

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With an Aug 1 deadline looming before the imposition of sweeping import duties on trade partners, Bessent said on Monday that the administration is more concerned with the quality of trade agreements than the timing.

Meanwhile, Trump continued his attack on US Federal Reserve chair Jerome Powell, calling him a “numbskull” who has kept interest rates too high, but he will be out in eight months.

Trump has been hammering at Powell for months for not cutting rates and frequently raised the possibility of ousting him.

The US central bank is widely expected to leave interest rates unchanged at their monetary policy meeting scheduled for next week. Gold tends to perform well in a low-interest-rate environment.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.82 per cent to 954.80 tonnes on Tuesday from 947.06 tonnes on Monday.

Spot silver eased 0.1 per cent to US$39.23 per ounce, platinum fell 0.3 per cent to US$1,437.83 and palladium slipped 0.7 per cent to US$1,266.49. REUTERS