Gold prices surged more than 1% on Monday (July 21st) as the US dollar and US Treasury yields fell sharply amid uncertainty over a trade deal, amidst overall risk sentiment in the market. At the time of writing, XAU/USD was trading at $3,397 after bouncing off a daily low of $3,338.
Risk appetite improved as traders awaited the release of US financial reports. Meanwhile, the August 1st deadline for tariffs imposed by the White House is approaching, making investors uneasy about the trade deal between the US and its three major trading partners, including the European Union (EU), Canada, and Mexico.
Trade news revealed that EU envoys will meet as early as this week to formalize a retaliatory plan in the event of a possible no-deal scenario with US President Trump, according to Bloomberg.
The Wall Street Journal reported that US Treasury Secretary Bessent recommended that Trump not fire Fed Chairman Jerome Powell, as it would raise doubts about the independence of the Federal Reserve (Fed). This would trigger a market reaction, depressing the US dollar and raising US Treasury yields.
Other news revealed that the People's Bank of China (PBOC) maintained its key lending rate at its latest meeting, as expected.
This week, US economic data remains limited with the release of housing data, Jobless Claims for the week ending July 19, and Durable Goods Orders data. (alg)
Source: FXstreet
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