Gold rallies as market sniffs Fed pivt next year, US yields slip

NEW YORK (July 9) Gold price registers decent gains on Wednesday as US Treasury yields recede, even though the Greenback trades solidly against its peers. Trade developments continued to dictate the market’s direction, while the latest minutes indicate that officials are still considering a rate cut in 2025. At the time of writing, the XAU/USD trades at $3,312, up 0.31%.

The Fed’s minutes showed that most officials see a rate cut to the Fed funds rate this year as appropriate, while a couple are considering a reduction in July, if data evolves as expected.

The White House continues to deliver blows to minor and major trading partners, releasing the latest batch of letters to countries like the Philippines, Moldova, Algeria, Iraq, Libya, Brunei, and Sri Lanka. Duties were set at around 20% to 30% for the countries mentioned.

On Wednesday, the US President Donald Trump emphasized that he would apply 10% additional tariffs to countries aligning themselves with anti-American policies of the BRICS.

Data from the Chicago Board of Trade revealed that market players are eyeing 50 basis points (bps) of easing in 2025.

Daily digest market movers: Gold price surges as White House announces another tranche of letters

• Gold’s uptrend remains intact, as it remains above strong support near $3,250. The drop in US Treasury yields boosted the yellow metal. The US 10-year Treasury note yield drops six basis points to 4.342%. US real yields are also edging lower by six bps at 1.992%. The US Dollar Index (DXY), which tracks the Greenback’s performance against a basket of currencies, is flat at 97.51.
• FOMC Minutes showed that some Fed officials do not see a rate cut in 2025, citing that inflation pressures remain high, along with inflation expectations edging up and ongoing economic resilience. All participants viewed the current policy rate as appropriate. Participants agreed that stagflationary risks had diminished, though they remain elevated.
• Washington unveiled tariffs to the Philippines (20%), Moldova (25%), Algeria (30%), Iraq (30%), Libya (30%), Brunei (25%), Sri Lanka (30%), and lastly Brazil (50%).
• Trump once again criticized Federal Reserve Chair Jerome Powell, adding that the central bank needs to cut rates by at least 3%. He sent copper prices higher as he is threatening to impose a 50% duty on the red metal.
• Even though the XAU/USD remains pressured, the World Gold Council (WGC) announced that Gold ETFs drew the largest inflow in five years during the first half of 2025. “Gold ETFs recorded an inflow of $38 billion in the first half of 2025, with their collective holdings rising by 397.1 metric tons of Gold.” The total holdings by the end of June rose to 3,615.9 tons, the largest since August 2022.
• The PBoC revealed that it added 70,000 ounces, meaning that the central bank’s Gold reserves increased by 1.1 million ounces since purchases resumed last November.

FXStreet