Gold prices eased a bit on Tuesday as investors took some profits following Monday’s rally to a one-month high. Uncertainty around U.S. tariffs and interest rate policies continued to support demand for safe-haven assets.
At 04:25 ET (08:25 GMT), spot gold declined 0.2% to $3,389.27 per ounce, after surging 1.4% the previous day. Gold futures also slipped 0.2% to $3,401.12 per ounce.
Growing Concerns Over Imminent U.S. Tariffs
The market remained jittery as the August 1 deadline for the introduction of U.S. tariffs approached. Investor confidence was shaken by fading prospects of a trade agreement between the European Union and the United States. Reports indicated the EU is preparing retaliatory tariffs in response to U.S. tariff plans that exceeded initial expectations.
Additionally, the Trump administration signaled little likelihood of extending the tariff deadline. Over the last two weeks, President Donald Trump issued several letters announcing tariffs ranging from 20% to 50% on key U.S. trading partners, prompting worries in the market and threats of countermeasures from affected countries.
This unresolved trade tension has fueled demand for gold and other precious metals, which have seen sharp price gains recently. However, on Tuesday some investors booked profits, with spot silver slipping 0.4% to $39.165 per ounce and spot platinum falling 0.5% to $1,488.10 per ounce.
Among industrial metals, benchmark copper futures on the London Metal Exchange inched up 0.1% to $9,879.25 per ton, while COMEX copper futures rose 0.2% to $5.6480 per pound. The 50% U.S. tariff on copper is also set to take effect on August 1.
Data from the Shanghai Futures Exchange revealed that inventories of base metals increased last week. Copper stocks rose by 3,094 tonnes to 84,556 tonnes as of Friday, aluminium inventories climbed 5,625 tonnes to 108,822 tonnes, and zinc stocks grew 9.3% week-over-week to 54,630 tonnes—the highest since April 18.
Bernstein Projects Stronger Gold Prices
Bernstein analysts argued that Wall Street might be underestimating gold’s potential by relying on outdated forecasting techniques. They identified six reliable methods—mostly focused on government and monetary policy factors—and averaged these to forecast gold at $3,700 per ounce by 2026, significantly higher than the current consensus estimate of $3,073.
Dollar Weakens Amid Fed Speculation
Gold’s rally on Monday coincided with a slight retreat in the dollar, which paused after two weeks of gains. The dollar remains relatively strong, fueled by expectations that the Federal Reserve will keep interest rates steady at next week’s meeting.
Market nerves persist, however, due to concerns over the Fed’s independence amid rumors that President Trump may attempt to remove Fed Chair Jerome Powell. Powell has indicated little inclination to lower rates, frustrating the White House and its supporters.
Powell is scheduled to speak later Tuesday, though it remains uncertain if he will comment on monetary policy given the Fed’s usual media blackout ahead of meetings.
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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