Gold prices have continued their upward trend for a second consecutive day, fuelled by growing optimism that the US Federal Reserve will initiate rate cuts later in the year. Investors are also closely watching US trade negotiations, with a tariff deadline looming on July 9. Bullion traded near $US3310 an ounce, following a 0.9 per cent increase on Monday, as traders factored in increased probabilities of at least two US rate reductions during the year.
The upcoming jobs report on Thursday is also anticipated to potentially trigger a drop in Treasury yields, a situation that typically benefits gold. Supported by ongoing trade and geopolitical risks, gold has risen by approximately a quarter this year and is now trading less than $200 short of April’s record high.
Uncertainty surrounding the economic impact of the Trump administration’s tariff policies, coupled with a move away from US assets, has led to a decline in the US dollar. A gauge of the dollar has dropped almost 11 per cent in the first six months of the year, marking its worst performance since 1973. Commonwealth Bank analyst Vivek Dhar noted that gold has the most potential to gain in the short term if the US dollar continues to decline.
As of 8.44am in Singapore (10.44am AEST), spot gold rose 0.3 per cent to $US3311.64 an ounce. The Bloomberg Dollar Spot Index experienced a 0.1 per cent decrease after falling 0.5 per cent on Monday.
