PRECIOUS-Gold hits five-week peak on trade jitters, lower bond yields
July 22 (Reuters) - Gold climbed to a five-week high on Tuesday, drawing strength from trade uncertainty and weaker U.S. bond yields as investors continue to eye U.S. President Donald Trump's August 1 tariff deadline.
Spot gold XAU= rose 1% to $3,428.84 per ounce by 2:10 p.m. ET (1810 GMT), hitting its highest since June 16.
U.S. gold futures GCcv1 were up 1.1% at $3,443.70.
The yield on benchmark U.S. 10-year notes US10YT=RR fell to a near two-week low, making non-yielding bullion more attractive. USD/
"Trade uncertainty is prompting some safe haven demand. The U.S. has got several trade deals in the works and there's rumors that the EU and the U.S. might not be able to come to an agreement or certainly are not anywhere close yet," said Jim Wyckoff, a senior analyst at Kitco Metals.
Treasury Secretary Scott Bessent on Tuesday said he would meet his Chinese counterpart next week, suggesting a possible extension of an August 12 tariff deadline. He added that the U.S. is poised to announce "a rash of trade deals" with other countries.
Meanwhile, European Union diplomats hinted that the EU is looking at broader counter-measures against the U.S. as prospects for a trade agreement dwindle.
"Gold is likely to stay bullish. A strong resistance is seen near $3,420. On the flip side, $3,350 is a support," said Jigar Trivedi, a senior commodity analyst at Reliance Securities.
Investors are also positioning ahead of next week's Federal Reserve meeting. While the Fed is expected to hold rates steady, markets are eyeing a potential rate cut in October. USDIRPR
Gold, traditionally considered a hedge during times of uncertainty, also tends to do well in a low-interest rate environment.
Bessent on Tuesday also said there was no need for Fed Chair Jerome Powell to step down immediately, a day after calling for a review of the central bank as an institution.
Meanwhile, Fed Vice Chair Michelle Bowman underscored the importance of the central bank's independence amid rising pressure from Trump to lower borrowing costs.
Spot silver XAG= rose 0.6% to $39.16 per ounce, platinum XPT= lost 0.5% to $1,431.64 and palladium XPD= gained 1.4% to $1,282.82.
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