Beijing: Gold prices continued their upward momentum on Tuesday, stabilizing above a one-month high, as a weakening U.S. dollar and declining Treasury yields bolstered investor appetite for the precious metal. The market's movement underscores growing global uncertainty and the enduring allure of gold as a safe-haven asset.
Spot gold hovered around $3,390.69 per ounce, its highest level since mid-June, buoyed by a subdued greenback that made the metal more affordable for investors holding other currencies. Simultaneously, the 10-year U.S. Treasury yield slipped, reducing the opportunity cost of holding gold, which does not offer interest or dividends.
U.S. gold futures mirrored the spot market’s gains, trading at approximately $3,405.20, reflecting strong investor confidence amid macroeconomic volatility. Analysts noted that the sustained strength in gold is directly tied to the dollar's retreat and widespread speculation over upcoming policy moves by major central banks.
Investors are closely watching developments ahead of a looming August 1 trade deadline, which could bring new tariffs between the United States and the European Union. The uncertainty surrounding the outcome has spurred a risk-off sentiment in the markets, pushing many to seek refuge in gold and other traditional hedging instruments.
Meanwhile, the European Central Bank is expected to maintain its benchmark interest rate at 2.0% during its policy meeting on July 24, a signal that rate cuts may remain off the table in the near term. In contrast, market participants have priced in a 59% probability that the U.S. Federal Reserve will reduce rates in September, which would typically further enhance the appeal of gold.
In the broader precious metals market, silver slipped slightly to $38.84 per ounce, while platinum saw mild gains at $1,449.11. Palladium, however, experienced a modest decline, trading at $1,262.89.
With global markets facing geopolitical tensions, fluctuating interest rate expectations, and trade uncertainties, gold's role as a store of value appears more relevant than ever. Analysts believe that if the dollar continues to soften and central banks maintain dovish stances, gold could remain elevated or even test new highs in the weeks to come.