FX.co ★ Gold Holds Strong Momentum

Gold prices remained around $3,350 per ounce on Tuesday, reducing earlier session gains but maintaining a strong movement since revisiting record highs in the second quarter. This has been amid continuing uncertainties over tariffs and robust purchases by central banks. In a significant announcement, US President Trump notified 25 countries, including major trade partners such as Canada, Mexico, and the EU, of new tariff rates effective August 1st, while also politically targeting Brazil with tariffs. This uncertainty surrounding US economic policy has weakened the US dollar, prompting central banks to boost their gold reserves as opposed to investing in the typical Treasury securities. Surveys indicate that central banks collectively increased their gold holdings by a net 20 tonnes in May, spearheaded by Kazakhstan, Turkey, Poland, and Singapore. Concurrently, expectations for the Federal Reserve to maintain rates at the upcoming meeting have strengthened, alongside US headline inflation rising to 2.7% in June, as projected, while markets continue anticipating two rate cuts within the year.