Gold prices steadied at the start of the week, trading near $3,350 an ounce, as investors absorbed mixed signals from US Federal Reserve officials regarding interest rate policy and the broader economic impact of President Donald Trump’s tariff strategy.
As of 8.54 am in Singapore, spot gold was slightly higher at $3,353.80 an ounce. The Bloomberg Dollar Spot Index edged 0.1% lower, while silver and platinum saw little movement. Palladium recorded a slight rise.
Last week, bullion saw a modest decline but remains elevated, having climbed over 25% this year amid escalating geopolitical risks and doubts surrounding dollar-denominated assets. Despite that, the precious metal has largely traded within a narrow band in recent months as markets await clearer cues on global trade talks, interest rate directions, and tariff implications.
The divide among Fed officials continues to widen. Governor Christopher Waller has come out in favour of a rate cut, while Governor Michelle Bowman signalled she is also open to the idea. However, other policymakers are treading carefully, citing persistent inflationary risks tied to tariffs. Lower borrowing costs are typically seen as supportive for gold, which does not yield interest.
Meanwhile, Trump’s influence on the central bank has not gone unnoticed. The White House is reportedly assessing potential candidates to replace Fed Chair Jerome Powell, whose term ends in May, with a preference for someone who would favour rate reductions. Trump also rejected a Wall Street Journal report alleging Treasury Secretary Scott Bessent warned him that sacking Powell could provoke a negative market reaction.
On the global stage, attention is turning to trade. The European Union is expected to convene this week to prepare a response in case of a breakdown in negotiations with Trump. The US president has set an August 1 deadline for introducing what he calls reciprocal tariffs, and markets are closely tracking developments with multiple trading partners.
Bloomberg
