Gold held a decline as investors braced for a US Federal Reserve policy decision, a raft of vital economic data, and outcomes from US trade negotiations.
Bullion was little changed near US$3,321 ($4,278.61) an ounce during Asian trading hours, following a 0.7% decline on Monday after the greenback surged amid renewed fears that 15% duties on European exports may impact global growth. A stronger dollar makes gold more expensive for most buyers.
With US President Donald Trump’s Aug 1 US tariff deadline fast approaching, several other trading partners — including South Korea and Brazil — are still racing to secure agreements.
Meanwhile, US Commerce Secretary Howard Lutnick on Monday said a 90-day extension of a trade truce between the US and China was a “likely outcome”.
Investors are also shifting attention to this week’s slate of key indicators — from jobs and inflation to economic activity as well as the Fed’s policy decision Wednesday.
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US central bank officials are expected to hold rates steady, although some committee members may register dissents against the pause. Lower borrowing costs tend to benefit bullion, as it doesn’t pay interest.
“Three major events — the tariff talks, Fed rate decisions, and non-farm payroll reports — are lined up, likely to amplify gold-price volatility,” Pepperstone Group research strategist Dilin Wu said in a note. “Gold currently sits at a crossroads between technical and fundamental forces.”
Gold is up by more than a quarter this year, with uncertainty around Trump’s aggressive attempts to reshape global trade, along with conflicts in Ukraine and the Middle East, spurring a flight to safety. Still, the precious metal has been trading within a tight range over the past few months after spiking to an all-time high above US$3,500 an ounce in April.
See also: Gold steady as traders weigh US economy, rate cut directions
Spot gold was up 0.2% to US$3,321.77 an ounce at 7.52am in London. The Bloomberg Dollar Spot Index was up 0.1%, following a 0.8% gain in the previous session. Silver slipped, platinum was flat and palladium fell.
Chart: Bloomberg
