Gold (XAU/USD) edged higher for a second consecutive session on Thursday, but the upside remains capped due to conflicting market cues. After rebounding from a 1.5-week low, the metal is trading with a mild positive bias, though a lack of strong follow-through buying suggests investor caution ahead of fresh catalysts.
The Federal Reserve’s June meeting minutes, released Wednesday, revealed that only a few officials support a rate cut as early as this month. Concerns over inflation—partly due to new US tariffs—have prompted some policymakers to push back against immediate easing. This outlook supports the US Dollar and tempers gold’s appeal, given the metal offers no yield.
However, broader market sentiment still expects the Fed to reduce rates later this year. This belief, combined with strong demand in Wednesday’s 10-year US bond auction, has pushed Treasury yields lower and kept USD bulls on the back foot—providing some support to gold prices.
Geopolitical tensions also remain a factor. President Donald Trump announced new tariffs on copper imports and issued letters to eight smaller trading partners, emphasizing there will be no extensions. He also warned that any retaliatory tariffs would be met with further US action. These developments have fueled mild safe-haven flows into gold.
Despite the softer US Dollar, gold’s momentum is being weighed down by uncertainty around Fed policy. Traders now turn their attention to upcoming US Weekly Jobless Claims and speeches from Fed officials for further direction.
