Gold slips as dollar strengthens

August 5, 2025 (MLN): Spot gold dropped by 0.26% at $3,353.38 an ounce as of [4:05 pm] PST on Tuesday, according to data reported by Mettis Global.

Gold slipped  due to an uptick in the dollar, though prices remained near a two-week high on growing expectations of a U.S. rate cut in September.

U.S. gold futures were unchanged at $3,423.20.

The dollar index rose 0.2%, rebounding from a one-week low earlier in the session. A firmer dollar typically reduces gold’s appeal for investors holding other currencies.

Despite the dollar's bounce, gold continues to draw support from weak U.S. economic data and dovish policy expectations.

Friday’s employment report revealed slower-than-expected job growth in July and significant downward revisions to May and June payroll figures, which cut a combined 258,000 jobs from previous estimates.

Market expectations for a September rate cut have risen sharply, with the CME FedWatch tool placing the probability at nearly 88%, up from 63% a week ago.

Traders are also largely pricing in at least two quarter-point rate cuts before year-end.

President Trump’s dismissal of the U.S. labor statistics chief following the weak jobs report and his plan to appoint a new Fed governor have added uncertainty to the market.

Geopolitical tensions are also rising, with Trump threatening to increase tariffs on Indian goods beyond the 25% hike imposed last month.

The president cited India's continued imports of Russian oil as justification for the move.

Gold, which traditionally performs well in times of political or economic instability, also benefits from a low-interest rate environment, which reduces the opportunity cost of holding the non-yielding asset.

“I still do not see traders pushing up aggressively above the $3,450 level unless we have a very clear catalyst,” said Kelvin Wong, senior market analyst at OANDA to CNBC.

In other metals, silver rose 0.2% to $37.46 per ounce, while platinum fell 1.3% to $1,312.30 and palladium dropped 1.6% to $1,187.04.

Meanwhile, South African miner Sibanye-Stillwater has called on the U.S. to impose tariffs on Russian palladium imports, aiming to bolster the long-term stability of American supply chains, according to CNBC.

Copyright Mettis Link News