Gold prices ease after hitting one-month high amid dollar rebound 

WASHINGTON: Gold prices edged lower on Tuesday after hitting their highest level in more than a month, as investors locked in profits and a slight rebound in the US dollar weighed on the metal’s appeal. Market participants also kept a close watch on trade talks ahead of an August 1 deadline.

By 0656 GMT, spot gold had slipped 0.3 per cent to $3,384.49 per ounce, after briefly touching its strongest level since June 17 earlier in the session. US gold futures were also down 0.3 per cent, trading at $3,397. 

“Gold’s recent rally has been driven largely by positive technical signals and weakness in the dollar,” said Kelvin Wong, senior market analyst at OANDA. 

However, the dollar index inched up 0.1 per cent on Tuesday, recovering slightly after dropping to a one-week low on Monday. A stronger dollar tends to make gold more expensive for holders of other currencies. 

Trade tensions between the US and the European Union also remained in focus. According to EU diplomats, the bloc is considering broader countermeasures as talks with Washington stall. US President Donald Trump has warned of imposing 30 per cent tariffs on European imports if no deal is reached by the August 1 deadline.

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“There’s a chance that the US and its trading partners won’t reach an agreement, which could create some uncertainty in the markets,” Wong noted. “This may prompt some investors to seek safety through hedging strategies.” 

Meanwhile, central bank decisions are also on the radar. The European Central Bank is expected to keep its benchmark interest rate unchanged at 2.0 per cent when it meets on July 24, following several cuts in recent months. Attention is also turning to the US Federal Reserve, which will hold its next policy meeting next week. 

According to the CME FedWatch Tool, traders see about a 59 per cent chance of the Fed cutting interest rates in September — a move that typically supports gold, which performs better in a low-rate environment. 

Among other precious metals, spot silver edged down 0.1 per cent to $38.86 per ounce. Platinum rose 0.6 per cent to $1,447.53, while palladium gained 0.2 per cent to $1,266.95.  

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