- Trump sends personal note to Powell on rates
- Higher tariffs loom after July 9 deadline, says Bessent
- Goldman Sachs expects Fed to deliver three rate cuts in 2025
- US dollar index falls to over 3-year low
July 1 (Reuters) - Gold prices rose on Tuesday as a weaker dollar and growing uncertainty over trade deals ahead of U.S. President Donald Trump's July 9 deadline boosted demand, with expectations of Federal Reserve rate cuts lending additional support.
Spot gold gained 0.7% to $3,325.79 per ounce by 0621 GMT, while U.S. gold futures added 0.9% to $3,337.30.
"Weaker dollar and concerns about the impact if (Donald) Trump's tariff deadline is not extended are supporting gold at the moment," said Nicholas Frappell, global head of institutional markets at ABC Refinery.
The U.S. dollar index fell to a more than three-year low, making bullion more affordable for holders of other currencies.
On Monday, Trump expressed frustration with U.S.-Japan trade negotiations as Treasury Secretary Scott Bessent warned countries could be notified of sharply higher tariffs.
Tariff rates ranging from 10% to 50%, announced on April 2, are set to take effect on July 9 following a 90-day pause imposed by Trump to allow time for bilateral trade negotiations.
Meanwhile, Trump ramped up his push for rate cuts, sending Fed Chair Jerome Powell a list of global central bank interest rates annotated with handwritten notes saying U.S. rates should be between Japan's 0.5% and Denmark's 1.75%.
The call to lower rates "is also having an impact on the market although I am a bit surprised that the market is that optimistic about rate cuts," Frappell said.
Low rates make gold more attractive by lowering the cost of holding it.
Goldman Sachs now anticipates three Fed rate cuts this year starting in September, up from its earlier forecast of just one in December, citing minimal tariff impact and labor market weakness.
Investors are closely monitoring a series of U.S. labour market reports in this holiday-shortened trading week, culminating in Thursday's government payrolls data.
Spot silver was steady at $36.07 per ounce, platinum lost 0.5% to $1,346.41 and palladium gained 1.3% to $1,111.60.
Reporting by Anmol Choubey in Bengaluru; Editing by Sumana Nandy, Harikrishnan Nair, Rashmi Aich and Mrigank Dhaniwala
Source: Reuters