- Gold prices are showing slight gains, hovering around $3,350 during the early Asian trading sessions on Monday.
- Amid economic uncertainty and declining interest rates, gold prices receive support, leading to increased demand for safe assets.
- An Upbear UOM investigation might help mitigate potential gold losses.
During the early Asian session on Monday, the price of gold (XAU/USD) is expected to post a moderate profit nearing $3,350. The ongoing uncertainty surrounding trade negotiations appears to enhance safe-haven demand for gold, especially as the U.S. tariff deadline approaches. Later on Tuesday, traders will be looking to remarks from Federal Reserve Chairman Jerome Powell for further insight.
U.S. Secretary of Commerce Howard Lutnick mentioned on Sunday that August 1 is the date by which the U.S. may start imposing tariffs. Although President Trump’s deadline has shifted since the sudden announcement of new tariffs on April 2, White House officials now assert that August 1 is a firm timeline. This uncertainty regarding new tariff rates might push gold prices upward, as gold is often viewed as a reliable safe asset in turbulent times.
Furthermore, statements from Federal Reserve officials are likely to impact interest-free assets. Governor Christopher Waller noted on Thursday that the Fed is inclined to lower interest rates, given the mounting risks to the economy. Analysts are largely anticipating that the Fed will maintain current rates at the end of this month, forecasting a 94% chance of no change and only a 6% chance for a modest rate cut of 25 basis points (BPS).
Meanwhile, fluctuations in the demand for the U.S. dollar (USD) may influence gold prices as well. A recent preliminary index from the University of Michigan (UOM) showed consumer sentiment rising from 60.7 in June to 61.8 in July, which exceeds market expectations of 61.5.
