Gold prices rose more than 1% on Monday, reaching their highest level in nearly five weeks, as the dollar and U.S. Treasury yields weakened. Market attention remains focused on upcoming tariff negotiations scheduled for August 1st.

Latest figures show: While New York gold futures edged down 0.3% to $3,354.70 per ounce, spot gold gained 1.3% to $3,394.23 per ounce — its highest level since June 17. The dollar index fell 0.6% last Friday, making dollar-denominated gold more attractive to buyers outside the U.S.

Trade Tensions Support Gold

David Meger, director of metal trading at High Ridge Futures, noted that uncertainty surrounding the August 1 tariff agreement deadline is providing strong support for gold prices. "As we approach this critical date, market participants are hedging against potential disruptions," Meger explained.

European Union diplomats have revealed that the bloc is considering countermeasures amid difficulties in reaching a fair trade agreement with the United States. This geopolitical tension continues to drive safe-haven demand for precious metals.

Federal Reserve Speculation Adds Volatility

The interest rate outlook remains another key factor influencing gold markets. According to the CME FedWatch tool, traders currently assign a 59% probability of a Federal Reserve rate hike in September. However, recent comments from U.S. Treasury officials suggesting a potential overhaul of the Fed's structure have introduced new uncertainty.

"The entire Federal Reserve framework needs reevaluation," stated Treasury official Scott Bessent, fueling speculation about potential leadership changes at the central bank.

Demand Concerns Emerge

Market observers are noting weakening physical demand from key markets. China, the world's largest gold consumer, purchased just 63 metric tons last month — the lowest level since January. Platinum imports in June also declined 6.1% from the previous month.

Despite these demand concerns, analysts suggest that current macroeconomic conditions — including trade tensions, currency fluctuations, and monetary policy uncertainty — continue to create favorable conditions for gold investors. Market participants are advised to monitor these developments closely when making investment decisions.