Gold prices inched higher Thursday, driven by increased safe-haven buying following renewed tariff threats from U.S. President Donald Trump and softer U.S. economic indicators, which have fueled expectations of an interest rate cut by the Federal Reserve.
By 04:30 ET (08:30 GMT), Spot Gold climbed 0.1% to $3,373.80 per ounce, while December Gold Futures rose 0.4%, reaching $3,447.90 per ounce.
Trump’s Semiconductor Tariff Warning
Investor interest in gold was supported after President Trump announced plans to impose a 100% tariff on semiconductor imports from certain countries unless they boost chip manufacturing within the U.S. This move aims to encourage domestic production but raised concerns over possible disruptions to global supply chains and the risk of increased inflation.
Additionally, Trump signed an order doubling tariffs on Indian imports to 50%, citing India’s ongoing purchases of Russian oil. Announcing the reciprocal tariffs on his social media platform late Wednesday, Trump confirmed they would take effect at midnight, contributing to market uncertainty.
The anticipation of rising costs and heightened trade tensions bolstered gold’s appeal as a traditional safeguard against inflation and economic instability.
Growing Expectations for Fed Rate Cuts
Gold’s rally also reflected rising market sentiment that the Federal Reserve could start cutting interest rates as soon as September. Recent data highlighted a slowdown in the U.S. services sector during July, compounding last week’s weaker-than-expected nonfarm payroll numbers.
Investors are awaiting weekly initial jobless claims later Thursday, with forecasts pointing to a modest increase of 3,000 claims to 221,000 for the week ending August 2, reinforcing concerns over a cooling U.S. economy.
According to CME’s FedWatch Tool, markets now assign a 95% probability to a rate reduction next month. Lower rates tend to make non-interest-bearing assets like gold more attractive by reducing their opportunity cost.
Metals Rise on Positive China Trade Data
Other metals also saw gains, with Platinum Futures advancing 1% to $1,353.70 per ounce and Silver Futures up 0.9% at $38.25 per ounce.
Copper prices increased as well, with London Metal Exchange Copper Futures rising 0.3% to $9,719.20 per ton, and U.S. Copper Futures gaining 0.5% to $4.4328 per pound.
The market also responded to Chinese trade figures showing a robust export surge, suggesting easing tensions between the U.S. and China on trade issues.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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