Gold Holds at a Crossroads: Between Global Tensions and Interest Rate Expectations
Gold prices held steady at around $3,321 per ounce in Asian trading on Tuesday, after a 0.7% decline the previous day. The decline was due to a strengthening US dollar, making gold more expensive for global buyers. The dollar's surge was fueled by renewed concerns about a possible 15% tariff the US might impose on European exports, which is feared could slow global economic growth.
Investors are currently bracing for three major market factors: the Federal Reserve's interest rate decision, a series of key economic data such as inflation and employment, and developments in trade negotiations between the US and its partners. Ahead of the August 1 deadline, several countries, such as South Korea and Brazil, are still trying to reach a trade deal with the US to avoid additional tariffs.
US Commerce Secretary Howard Lutnick said that extending the 90-day trade truce between the US and China is a possibility. Meanwhile, the Fed is expected to maintain its current interest rate in its policy decision on Wednesday, but some committee members are likely to voice dissent. If interest rates are lowered in the near future, this could be a positive sentiment for gold, as this precious metal is interest-free and more attractive when borrowing costs are low.
So far this year, gold prices have risen more than 25% due to increasing global uncertainty, including conflicts in Ukraine and the Middle East, as well as pressure from President Trump's aggressive trade policies. However, since reaching a record high above $3,500 per ounce last April, gold prices have tended to move within a narrow range. Meanwhile, silver and palladium have weakened, while platinum has stagnated. Analysts expect gold price volatility to increase in the coming days as policy developments and economic data are released.(ayu)
Source: Newsmaker.id
