Gold prices continued to climb, driven by escalating tensions in the Middle East, a weakening U.S. dollar, and renewed expectations of Federal Reserve rate cuts. U.S. gold futures rose 1.1% to $3,380.70, extending recent gains.
The U.S. dollar index fell to a near two-month low, making dollar-priced bullion more attractive to international buyers. Analysts noted that a technical breakout above $3,346 triggered increased buying, with geopolitical risks further fueling gold’s safe-haven appeal.
Tensions surged after the U.S. moved embassy personnel and military families out of the Middle East, following threats from Iran. President Trump confirmed the move and also announced that the U.S. and China had agreed on a framework to ease their ongoing trade conflict, helping avoid new tariffs for now.
On the economic front, softer-than-expected U.S. inflation data added to speculation that the Fed could cut interest rates sooner than anticipated. Traders are currently pricing in 50 basis points of cuts by the end of the year. Markets are now awaiting U.S. producer price data for further clues.
Adding to trade uncertainty, Trump said he would notify global partners of new unilateral tariff rates within two weeks, ahead of a July 9 deadline.
Amid global volatility, gold has gained 28% year-to-date, also supported by robust central bank demand and its role as a store of value in uncertain times.