Gold Records Its Largest Monthly GainGold (XAU/USD) prices rose towards $3,400 on Monday, as markets stayed cautious ahead of U.S. President Donald Trump’s tariff deadline on 1 August.Gold rises as the US dollar (USD) weakened further amid Trump’s ongoing trade battles and market concerns that he may seek to exert control over U.S. monetary policy. Trump has threatened to dismiss Federal Reserve (Fed) Chair Jerome Powell, seeking to pressure the central bank into cutting interest rates despite persistent inflation concerns.Meanwhile, U.S. Treasury Secretary Scott Bessent stated the need to review the entire Fed as an institution. "Talk of earlier-than-expected U.S. rate cuts is building, with speculation around a possible replacement of Fed Chair Jerome Powell and reshaping of the Fed adding to market jitters", said David Meger, Director of Metals Trading at High Ridge Futures. In this environment of low rates and heightened uncertainty, gold typically performs well as a reliable hedge.XAU/USD fell slightly during the Asian and early European trading sessions. Investors await Fed Chair Jerome Powell’s speech today at 12:30 p.m. UTC for more clues on the U.S. interest rate path. Key levels to watch are resistance at $3,400 and support at $3,370.Euro Holds Amid U.S.–EU Trade NegotiationsThe euro (EUR/USD) rose by 0.6% on Monday as investors looked ahead to the European Central Bank’s (ECB) monetary policy decision and monitored U.S.–EU trade developments. Market participants remained cautious amid lingering uncertainty, keeping the currency within a tight range.Analysts expect the ECB to leave interest rates unchanged on Thursday after eight consecutive cuts. Policymakers will likely adopt a wait-and-see approach to assess the impact of U.S. tariffs and the euro’s strength on the region’s growth and inflation outlook."We doubt ECB President Christine Lagarde will shake things up too much ahead of the central bank’s summer break, although there may be some continued concerns over recent euro strength and particularly the direction of tariffs", said Chris Turner, ING’s Global Head of Markets.Meanwhile, EU officials are preparing to meet as early as this week to discuss contingency plans if they can’t reach a trade agreement with the U.S. by the deadline. Tensions remain high as U.S. President Donald Trump’s tariff stance appears to have hardened ahead of the 1 August deadline.On Monday, U.S. Treasury Secretary Scott Bessent commented that the administration prioritises trade agreements’ quality over timing. He added that Trump would consider extending the deadline for countries showing meaningful progress in trade negotiations with Washington.Tariff Concerns Support GBPThe British pound (GBP/USD) rose by 0.61%, supported by a broadly weaker US dollar (USD). Markets stayed cautious amid concerns over U.S. tariffs and the Federal Reserve’s (Fed) independence. Investors remain on edge as they assess the potential economic fallout from trade tensions and the Fed’s next policy moves.With the 1 August deadline approaching, U.S. Commerce Secretary Howard Lutnick reiterated that it remains a ’hard deadline’ for implementing tariffs, even as negotiations continue. Markets are closely watching for signs of progress, with the risk of new tariffs weighing on global sentiment. ’The pound’s struggle to keep pace with the euro this year reflects a shift in market optimism in favour of Germany and the eurozone’, said Rabobank Senior FX Strategist Jane Foley.In the U.K., attention is turning to upcoming data releases. Analysts expect flash Purchasing Managers’ Index (PMI) data to indicate the mildest manufacturing contraction in six months. They also anticipate the report to reveal the strongest services sector growth in nearly a year, suggesting resilience in the U.K. economy despite external pressures.Warmer weather that has boosted consumer spending may also help retail sales rebound. Meanwhile, the Bank of England (BoE) may slow or pause sales of long-dated gilts amid weak demand from traditional buyers such as pension funds.