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Weaker dollar, bond yields lift gold to more than 5-week high

Synopsis

Gold prices saw a rise, reaching a five-week high. This increase is due to a weaker U.S. dollar and lower Treasury yields. Investors are watching for progress in U.S. trade talks. Donald Trump announced a trade deal with Japan. U.S. and Chinese officials will meet to discuss trade negotiations. Trump criticized Federal Reserve Chair Jerome Powell.

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

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

FUNDAMENTALS

  • Spot gold was steady at $3,430.19 per ounce, as of 0051 GMT, after hitting its highest since June 16 earlier in the session. U.S. gold futures were flat at $3,443.30.
  • The U.S. dollar index languished near a two-week low against its rivals, making greenback-priced gold less expensive for other currency holders.
  • Benchmark 10-year U.S. Treasury yields on Tuesday touched their lowest level since July 9.
  • U.S. President Donald Trump said the U.S. and Japan had struck a trade deal that includes a 15% tariff that will be levied on U.S. imports from the country.
  • U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal, U.S. Treasury Secretary Scott Bessent said.
  • With an August 1 deadline looming before the imposition of sweeping import duties on trade partners, Bessent said on Monday the administration is more concerned with the quality of trade agreements than the timing.
  • Meanwhile, Trump continued his attack on U.S. 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 U.S. 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% to 954.80 tonnes on Tuesday from 947.06 tonnes on Monday.
  • Spot silver eased 0.1% to $39.23 per ounce, platinum fell 0.3% to $1,437.83 and palladium slipped 0.7% to $1,266.49.

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