Precious Metals Market Update: Gold Faces Weekly Decline Amid Stronger Dollar

Gold Prices Under Pressure from Strengthening Dollar

As of August 1, 2025, gold prices have experienced a slight uptick, with spot gold rising 0.2% to $3,299.08 per ounce and U.S. gold futures increasing by 0.1% to $3,351.60. Despite this daily gain, gold is on track for a weekly loss of 1.2%, primarily due to a stronger U.S. dollar. The dollar has reached its highest level since May 29, driven by the Federal Reserve's continued hawkish stance, including holding interest rates steady at 4.25%-4.50% and dampening hopes for a September rate cut. Gold, which does not yield interest, typically suffers in high-rate environments. Source

Impact of Trade Tensions on Precious Metals

Market uncertainty remains due to escalating trade tensions following President Trump's executive order imposing tariffs of 10%-41% on imports from various countries. Notably, Canadian goods faced a duty increase to 35%, while Mexico received a 90-day reprieve. These trade conflicts have contributed to inflation as tariffs raise costs on imported goods. Analysts suggest that if trade tensions escalate and countries fail to negotiate lower tariffs, gold prices could rebound. Source

Gold Demand in Asia Amid Price Correction

Gold demand in key Asian markets saw a slight improvement this week, triggered by a recent price correction. Spot gold hit a one-month low on Wednesday and is set for a third consecutive weekly decline, which drew renewed but cautious interest from buyers. In India, where domestic gold prices dropped to around 97,700 rupees per 10 grams after reaching 100,555 rupees last week, jewellers reported better footfall and were looking to replenish inventory. As a result, discounts offered by Indian dealers narrowed from $15 to $7 per ounce. However, a weakened rupee offset some benefits of the international price drop. Source

AngloGold Ashanti's Profit Surge and Dividend Increase

AngloGold Ashanti reported a substantial 151% increase in second-quarter profits, reaching $639 million compared to $255 million in the same period the previous year. This significant growth was driven by record gold prices and higher production output. As a result of the improved financial performance, the company announced an increase in its quarterly dividend. Source

Technical Analysis and Investor Sentiment

From a technical perspective, gold's recent price movements suggest potential volatility ahead. The strengthening dollar and ongoing trade tensions are key factors influencing investor sentiment. Traders are closely monitoring upcoming U.S. jobs data for further economic signals that could impact precious metals markets.

Multi-Currency Pricing Overview

For our European readers, here's a snapshot of current gold prices in various currencies:

These figures highlight the importance of monitoring currency fluctuations when investing in precious metals.

Conclusion

In summary, the precious metals market is currently navigating a complex landscape shaped by a strengthening U.S. dollar, escalating trade tensions, and regional demand fluctuations. Investors are advised to stay informed and consider these factors when making investment decisions.