The price of gold is once again marching higher as the U.S. dollar continues to sink lower.
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The spot price of gold has gained nearly 1% in recent trading sessions to trade at $3,328.70 per ounce. The price of gold bullion is getting a lift from expectations of U.S. interest rate cuts later this year and as U.S. President Donald Trump renews his tariff threats on foreign nations.
The U.S. dollar index has slipped a further 0.2% against other world currencies, making gold less expensive to buy and hold for foreign investors. The U.S. dollar has suffered its steepest decline this year since 1973 when America abandoned the gold standard and decided to let its currency float.
The rise in gold prices is giving a boost to securities that are tied to the precious metal, such as the SPDR Gold Trust (GLD), Kinross Gold Corp. (KGC), and Newmont Corp. (NEM).
Flight to Safety
Investors are again seeking the safety of gold as President Trump renews his tariff campaign, threatening a 50% levy on copper imports and a 50% duty on goods from Brazil. Gold, which is widely viewed as a hedge against inflation and geopolitical uncertainty, also benefits from lower interest rates.
However, minutes from the U.S. Federal Reserve’s June 17-18 meeting show that only “a couple” of officials believe that interest rate cuts should happen in July, with most concerned about a rise in inflation sparked by President Trump’s tariffs. The Federal Reserve unanimously voted to hold rates steady at its June meeting. The central bank’s next policy meeting is scheduled for July 29-30.
GLD Performance
The SPDR Gold Shares exchange-traded fund (ETF) holds physical gold and tracks the spot price movements of the precious metal. As one can see in the chart below, GLD has risen 2.09% in the last three months.
