Gold firms on weaker dollar and US tariffs, fiscal uncertainty
Spot gold was up 1.3% at $3,347.42 per ounce, as of 1012 GMT, while U.S. gold futures rose 1.6% to $3,359.30. The U.S. dollar weakened to its lowest level since early 2022, making gold less expensive for overseas buyers.
"The precious metal's safe-haven appeal is being boosted by concerns over the U.S. fiscal outlook and ongoing tariff-related uncertainty, as the Trump administration keeps all options on the table ahead of the looming July deadline," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. President Donald Trump expressed frustration with U.S.-Japan trade negotiations on Monday as Treasury Secretary Scott Bessent warned that countries could be notified of sharply higher tariffs as a July 9 deadline approaches despite good-faith negotiations.
Markets are also focused on a vote over Trump's sweeping tax-cut and spending bill, adding to the already uncertain market environment.
Meanwhile, Trump continued to pressure the Federal Reserve to cut interest rates, sending Fed Chair Jerome Powell a list of global interest rates with handwritten notes.
"I expect prices to move higher in the near term, attracting additional buying interest as they approach $3,350, with the next significant resistance level around $3,370," Evangelista added.
On the data front, markets are waiting for job opening readings due later in the day, the ADP employment report on Wednesday and non-farm payrolls on Thursday.
Gold is seen as a safe haven during times of economic uncertainty and tends to perform well in low-interest rate environments.
HSBC said in a note that it expects official sector gold purchases to moderate on further rallies above $3,300 and could increase should gold correct nearer to $3,000.
Spot silver firmed 1.1% to $36.49 per ounce, platinum was down 0.7% at $1,343.51, while palladium gained 1.5% to $1,114.30.
(Reporting by Anushree Mukherjee in Bengaluru, additional reporting by Ishaan Arora; Editing by Emelia Sithole-Matarise, Alexandra Hudson)
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