Gold Price Hits 1-Month High, 'Cut Rates' Say Trump and Fed's Waller
Monday, 7/21/2025 14:45
The PRICE of GOLD rose to 1-month highs in most major currencies on Monday as the US Dollar weakened on the FX market following dovish remarks from a US Federal Reserve policy maker ahead of President Trump's 1st August trade tariffs deadline,
writes Atsuko Whitehouse at BullionVault.
With senior Fed officials now jockeying to replace current chair Jerome Powell −
repeatedly attacked by Trump for failing to cut interest rates more quickly and steeply − Fed Governor Christopher Waller on Friday called for a quarter-point cut at next week's July meeting.
Rising for the 3rd week in a row, spot gold prices climbed a further 1.1% by Monday lunchtime in London at $3387 per Troy ounce, the highest since 24th June.
"The private sector is not doing as well as everybody thinks it is," Waller said in a speech.
Trump himself called Powell a "numbskull" on Friday, saying he is "making it difficult for people, especially the young, to buy a house."
The odds of "no cut" next week remained at 95% today according to betting on CME derivatives exchange interest-rate futures, and market consensus then sees Fed rates finishing 2025 at 3.91%.
Requiring two quarter-point rate cuts by the end of this year, that would
match the Fed's own 'dot plot' consensus forecast, unchanged and repeated since December.
The Dollar Index – a measure of the US currency's value versus its major peers – meanwhile fell 0.4% to a 7-session low on Monday.
While that curbed gold price gains for non-Dollar investors, gold priced in Euros and UK Pounds still rose towards 1-month highs above €2896 and £2507 per ounce respectively.
"Gold's modest support comes from a weaker US Dollar," says analysis from Swiss bank and London bullion clearers UBS.
With
the 1st August deadline for US tariffs now "coming closer, the market focus will be if trade deals are announced, or tariffs are implemented."
According to the
Financial Times, Trump has escalated his demands in trade negotiations with the EU, pushing for a minimum tariff of 15% to 20% in any deal with the bloc.
US Commerce Secretary Howard Lutnick said Sunday that he is confident the White House can secure a EU deal, but 1st August is a hard deadline.
The
price of silver – which finds nearly 60% of its annual demand from industrial uses – today rose 1.0% to $38.55 per ounce, re-touching last Monday's new 14-year high.
Platinum, which sees two-thirds of its demand from industrial uses led by auto-catalysts, also climbed 2.0% to $1459 per ounce, setting a fresh 11-year high amid an
"unprecedented" surge in platinum lease rates to borrow the metal, indicating extreme tightness in immediate physical stockpiles.
Palladium also rose again, extending last week's 1/10th jump to surge 2.8% to a fresh 2-year high of $1274 per ounce.
The Japanese stock market was closed for a national holiday, but the Japanese Yen strengthened against the US Dollar after Prime Minister Shigeru Ishiba vowed to stay in power even though his ruling coalition suffered a bruising defeat in the weekend's upper house election.
European stocks fell ahead of those US-EU trade talks and Thursday's interest-rate decision from the 20-nation European Central Bank.
Waller's fellow Fed Governor Michelle Bowman – like him and Powell, also appointed by Trump – said in late June she believes rate cutting should resume as early as this month.
But John Williams, president of the New York Fed, and Boston Fed president Susan Collins have both said inflation could still rise further over the course of the year, leading them to urge caution.
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