Gold edges higher as dollar dips and bond yields retreat

SINGAPORE: Gold prices inched higher on Thursday, supported by a slight pullback in the US dollar and Treasury yields, while investors closely monitored the latest developments in trade tensions after President Donald Trump expanded his tariff campaign.

Spot gold rose 0.1 per cent to $3,316.77 per ounce by 0355 GMT, while US gold futures gained 0.2 per cent to $3,325.60.

“Gold bounced off a technical support level, and the broader dollar declined,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.

On Wednesday, Trump announced a 50 per cent tariff on US copper imports and an equal levy on goods from Brazil, both set to take effect from August 1. He also issued tariff notices to seven additional trading partners, adding to 14 announced earlier in the week, including South Korea and Japan. Unless agreements are reached, 25 per cent tariffs on these countries will also come into force on August 1.

“The market seems increasingly numb to tariff news. Tariff fatigue has set in, and traders are now looking for a fresh catalyst to shake up market volatility,” said Matt Simpson, senior analyst at City Index.

The US dollar index fell 0.2 per cent, while yields on benchmark 10-year US Treasury notes slipped from a three-week high. A weaker dollar makes gold more attractive to holders of other currencies, and lower bond yields reduce the opportunity cost of holding non-yielding bullion.

Minutes from the Federal Reserve’s June 17–18 meeting indicated that only “a couple” of officials supported cutting interest rates as early as this month. The majority preferred waiting until later in the year, citing inflation risks linked to the widening tariff measures.

The Fed unanimously voted to keep rates unchanged in June. Its next policy meeting is scheduled for July 29–30.

In other precious metals, spot silver rose 0.3 per cent to $36.44 per ounce, platinum slipped 0.2 per cent to $1,345.03, and palladium dropped 0.2 per cent to $1,102.69.

Read next: Oil retreats as trade tensions raise demand concerns