Gold prices rise to over one-month high on softer US dollar, bond yields

[BENGALURU] Gold prices climbed on Tuesday (Jul 22) to their highest point in more than a month, supported by a weaker US dollar and lower Treasury yields, as investors looked for progress in trade talks ahead of an Aug 1 deadline.

Spot gold was steady at US$3,390.73 per ounce, as at 0112 GMT, after hitting its highest since Jun 17 earlier in the session. US gold futures held their ground at US$3,404.20.

The US dollar index was hovering near a more than one-week low against its rivals, making greenback-priced gold less expensive for other currency holders, while benchmark 10-year US Treasury yields hit a more than one-week low on Monday.

The European Union is exploring a broader set of possible countermeasures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

Trade negotiations have yet to yield any meaningful deals as the clock ticks down on US President Donald Trump’s Aug 1 tariff deadline.

Also on radar, the European Central Bank is expected to hold interest rates steady at 2 per cent following a string of cuts at the end of its policy meeting on Jul 24. The US Federal Reserve monetary policy is scheduled for next week.

Traders are pricing about a 59 per cent chance of a rate cut by the Fed in September, according to the CME FedWatch Tool. Gold tends to perform well in a low-interest-rate environment.

Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.36 per cent to 947.06 tonnes on Monday from 943.62 tonnes on Friday.

China brought in 63 tonnes of gold last month, the lowest amount since January, data from the General Administration of Customs showed on Sunday.

Spot silver edged 0.1 per cent higher to US$38.93 per ounce, platinum added 0.4 per cent to US$1,444.05 and palladium eased 0.2 per cent to US$1,262.35. REUTERS