Gold prices climbed on Monday, with traders weighing diverging signals from the U.S. Federal Reserve over how President Donald Trump’s tariffs will affect inflation and monetary policy.
Spot gold rose 0.4% to $3,364 an ounce as of 10:45 a.m. London time, after touching as high as $3,370, its strongest level in weeks. The rally reflects growing demand for safe-haven assets amid global uncertainty.
Fed Governor Christopher Waller last week advocated for a rate cut, while Governor Michelle Bowman signaled openness to easing policy. However, other Fed officials remain cautious, warning that Trump’s tariff agenda could drive persistent inflation.
Lower interest rates generally support gold since it pays no yield, making it more attractive when borrowing costs fall.
The debate over policy comes as Trump keeps pressure on Fed Chair Jerome Powell, whose term ends in May 2026. The White House is reportedly reviewing possible successors, pledging to pick someone inclined to cut rates.
Meanwhile, EU officials are preparing for a potential no-deal scenario with the U.S. over trade, as Trump’s August 1 deadline for reciprocal tariffs approaches.
Gold has gained more than 25% this year, driven by geopolitical tensions and concerns over dollar-denominated assets. Other precious metals also rose, with silver, platinum, and palladium extending gains.