Gold holds steady amid growing expectations of US Fed rate cut

Gold prices kept rising after the release of weaker-than-expected US economic data. According to Bloomberg, the statistics bolstered market projections of at least two interest rate cuts by the Federal Reserve (Fed) this year to avert a recession.

Separate reports showed a decline in service sector business activity and a slowdown in employment growth in the US. In response to this data, Treasury bond yields fell as traders assessed the likelihood of two Fed rate cuts in October and December of this year. Lower rates tend to contribute to higher gold prices.

Bloomberg also notes renewed concerns about escalating tensions between the US and some of its major trading partners due to President Donald Trump's decision to double tariffs on steel and aluminum to 50%.

Active gold purchases by central banks have been another major driver of the yellow metal's rally. This trend is expected to continue amid geopolitical tensions and concerns about excessive dependence on the dollar.