Gold (XAU/USD) trades with modest gains around $3,350 in early Monday trading, as market participants remain cautious ahead of the looming August 1 U.S. tariff deadline. The metal finds support from global economic uncertainty and expectations of lower interest rates, although a firmer U.S. Dollar and improving sentiment indicators may temper further upside.
U.S. Commerce Secretary Howard Lutnick reaffirmed Sunday that August 1 is the final date for new tariffs to take effect unless trade agreements are reached. With negotiations still in progress, investor anxiety is building—bolstering gold’s traditional role as a hedge during geopolitical tension.
Adding to gold’s appeal are recent dovish signals from the Federal Reserve. Fed Governor Christopher Waller reiterated his stance that rate cuts should begin in July due to growing economic risks. Markets are largely pricing in no change at the upcoming meeting, but uncertainty remains high.
However, the yellow metal may face headwinds from a strengthening U.S. Dollar. The University of Michigan’s preliminary Consumer Sentiment Index rose to 61.8 in July, beating expectations and reflecting resilience in consumer outlook. This could cap gold’s near-term rally, especially if incoming data continue to signal economic strength.
For now, gold traders will keep a close watch on Fed Chair Jerome Powell’s speech scheduled for Tuesday, which may offer additional clues on the central bank’s policy path.
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