The yellow metal recorded gains of more than 1% in mid-trading on Tuesday, July 1, the first session of July and the third quarter of the year, after gains of 4.17% in the third quarter between April and June, maintaining its gains of more than 20% since the beginning of the year. Since the beginning of the week, gold has benefited from the decline in the US dollar, which is trading at its lowest levels since February 2022, and rising concerns about tariffs and financial prospects. Gold is trading up about 1.32% at $3,347 per ounce, while silver is trading at $36.49 per ounce, up 1.14%.
US President Donald Trump continued to pressure the US Federal Reserve and Chair Jerome Powell, stating that interest rates should be lower. He sent a list of global interest rates, indicating that interest rates should be at 1% or less, and asserting that the Federal Reserve has not performed its duties as required. With pressure from Trump, expectations that he will name a new Federal Reserve chairman, and a slowdown in inflation last week, market expectations for the Federal Reserve to cut interest rates three times in the second half of the year have increased, according to the CME FedWatch tool, compared to only two cuts the markets had been pricing in just a week ago. Meanwhile, investment bank Goldman Sachs has moved up its forecast for the resumption of interest rate cuts to September from December, predicting cuts in September, October, and December of 2.5 basis points each. Meanwhile, as the July 9 tariff truce approaches, concerns have risen regarding trade negotiations with some countries, such as Japan. President Trump expressed his frustration with the US-Japan trade negotiations, while the Treasury Secretary announced that some countries are expected to be notified of higher tariffs if an agreement is not reached by the specified date, which has fueled demand for safe-haven assets and currencies. An additional factor weighing on risk appetite in the markets, along with heightened uncertainty, is the vote on Trump’s comprehensive tax cuts and spending bill. Trump indicated that failure to pass the bill would mean a massive 68% tax increase, the largest in history.
Citibank, for its part, expects gold prices to stabilize between $3,100 and $3,500 in the third quarter of this year, with the situation in the Middle East calming down and global growth prospects improving. The bank expects that the $3,500 per ounce level reached in April could be the highest level for gold for the remainder of the year.
The US dollar index is trading at 96.15, its lowest level since February 2022, amid anticipation of today’s remarks by the US Federal Reserve Chairman, in addition to the US labor market figures, which will begin to be released today.
Platinum is trading at $1,345, down by approximately 0.49%, while palladium is up by approximately 1.69%, trading at $1,115.