Gold prices edged higher during Tuesday’s Asian trading session, supported by ongoing worries about U.S. President Donald Trump’s trade tariffs, which have sustained safe-haven buying. Additional caution stemmed from uneven economic data released out of China, reinforcing investor caution.
Geopolitical tensions between Russia and Ukraine further bolstered demand for gold, following the U.S. decision to send additional weaponry to Kyiv and threats of stricter sanctions targeting Russia’s oil sector.
Despite these drivers, gold remained mostly confined to a trading range between $3,300 and $3,500 per ounce, as the dollar’s resilience capped larger gains. Other base metals showed only modest movement. Market participants are now focused on forthcoming U.S. consumer price index (CPI) figures, looking for clues on potential interest rate moves.
Spot gold climbed 0.6% to $3,364.26 per ounce, while September gold futures gained 0.4%, reaching $3,373.52 per ounce as of 01:44 ET (05:44 GMT).
Tariff Uncertainty and Geopolitical Risks Support Gold
Tuesday’s rally in gold prices builds on recent strength amid elevated uncertainty surrounding Trump’s recent tariff announcements. Over the past week, the president unveiled steep tariffs on major trading partners, including 30% levies on imports from Mexico and the European Union.
The EU is reportedly preparing retaliatory measures, though Trump has left the door open for trade negotiations. With just over two weeks remaining for talks to avert these tariffs, markets remain uneasy about the potential onset of a renewed global trade conflict.
On the geopolitical front, Trump has granted Russia a 50-day window to negotiate a ceasefire in Ukraine. Yet tensions remain high as Trump publicly criticized Russian President Vladimir Putin, while the U.S. sent additional offensive weapons to Ukraine capable of striking Moscow.
Other precious metals such as silver and platinum held steady but remained below recent highs, after significantly outperforming gold in June. Both metals face increasing resistance after weeks of gains.
Dollar Holds Firm Ahead of CPI Data
The U.S. dollar steadied in Asian markets following strong gains earlier this month. Attention centers on the upcoming U.S. CPI report, which is expected to show a modest rise in both headline and core inflation for June. This data will be closely watched for its implications on inflationary pressures linked to Trump’s tariffs.
Persistent inflation reduces the likelihood of the Federal Reserve cutting interest rates aggressively, as policymakers have expressed caution about easing monetary policy amid trade uncertainties.
Copper Prices Under Pressure After Mixed China Data
Mixed economic signals from China weighed on copper prices, adding to broader risk aversion. On the London Metal Exchange, benchmark copper futures inched up 0.2% to $9,642.20 per ton, while U.S. copper futures rose 0.3% to $5.5460 per pound, stabilizing after a sharp decline from record levels.
China’s GDP growth in Q2 slightly exceeded expectations, buoyed by stimulus efforts and limited trade headwinds from the U.S. However, growth decelerated compared to the previous quarter, with June data on retail sales and fixed asset investment coming in below forecasts.
Industrial output surprised positively, but analysts from ANZ cautioned that the GDP report revealed underlying weakness, with deflationary pressures dampening growth. Beijing’s initial stimulus boost is also expected to fade in the latter half of the year.
As the world’s largest importer of copper, any sign of economic cooling in China could undermine demand for the metal.
Notably, China’s copper imports rebounded in June with a 9% increase, breaking two months of consecutive declines.
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