(Bloomberg) -- Gold held near its latest record as confidence grows the Federal Reserve will implement another rate cut as early as July, while the Trump administration’s latest trade salvos against China bolstered haven demand.
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Bullion traded less than $10 shy of Monday’s fresh all-time high of $2,956.19 an ounce. Amid mounting concerns over the outlook for the US economy, swap markets now expect the Fed’s next monetary easing to arrive two months earlier than was expected just last week. Lower rates are positive for bullion as it doesn’t pay interest.
Meanwhile, President Donald Trump took aim at China with a series of moves involving investment, trade and other issues that raises the risk ties may worsen between the US and its top economic rival.
Gold has also received a boost from lower Treasury yields after an auction for two-year notes drew record demand. The move added to a rally in government debt, following a soft US business activity print last week. Lower yields also tend to benefit the non-interest paying precious metal.
The shifting views on the Fed’s monetary policy — coupled with uncertainty over Trump’s trade and geopolitical agendas — have sparked renewed interest in bullion-backed exchange-traded funds. Last week, net inflows were the largest since 2022, adding extra juice to gold’s rally of more than 12% so far this year.
Looking ahead, investors will be analyzing Friday’s core personal consumption expenditures price index for clues about the central bank’s monetary policy trajectory. The Fed’s preferred inflation gauge is expected to cool to the slowest since June, but glacial progress on taming prices may keep officials cautious.
Spot gold was steady at $2,950.91 an ounce at 8:11 a.m. in Singapore. The Bloomberg Dollar Spot Index was little changed. Silver and platinum dipped, while palladium was flat.
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