FX.co ★ Gold Hits One-Month High on Trade Tensions

Gold prices have soared to $3,390 per ounce, marking their peak since mid-June. This surge is attributed to a weakening US dollar and declining Treasury yields, which have amplified the demand for safe-haven assets in the face of escalating trade tensions. U.S. Commerce Secretary Howard Lutnick expressed optimism about reaching an agreement with the European Union. However, he cautioned that the August 1 deadline for implementing tariffs is indeed firm, emphasizing that the initial 10% tariff will remain in place throughout the negotiation process. His comments followed President Trump's earlier dispatch of official communications to major trading partners, specifying the tariff rates they would incur absent a deal. In response, the EU is preparing to announce retaliatory measures against the United States, as prospects for a favorable trade accord with Washington appear to wane. Concurrently, in the realm of monetary policy, market participants are factoring in approximately a 60% likelihood of a Federal Reserve interest rate cut in September. This is amid rising conjecture concerning potential leadership changes at the Federal Reserve and a potential restructuring of the institution.