Gold prices bounced back in Asian trading on Thursday, recovering from recent losses as concerns over impending trade tariffs fueled demand for safe haven assets. Investors grew increasingly anxious ahead of an August 1 deadline set by former President Donald Trump for imposing new tariffs.
The rebound in gold was somewhat limited by the Federal Reserve’s decision to keep interest rates unchanged and its indication that a rate cut in September is unlikely.
Spot gold rose 0.8% to $3,301.21 an ounce, while gold futures held near flat levels at $3,352.70 per ounce as of 02:08 ET (06:08 GMT).
Gold had touched a one-month low on Wednesday, pressured by the Fed’s hawkish stance, which it maintained despite pushback from Trump.
Tariff Tensions Revive Gold’s Appeal
Investor focus remained on the upcoming deadline for fresh tariff measures that Trump plans to implement. On Wednesday, he announced a trade agreement with South Korea that includes a 15% tariff on imports. Additionally, India will face a 25% levy on its exports to the U.S. starting Friday, with no deal yet finalized. Brazilian exports are also facing tariffs of up to 50%.
A report from Politico noted that “Trump will sign executive orders on Thursday imposing higher tariffs on countries that have failed to reach trade deals.”
Worries over escalating trade frictions renewed investor interest in gold, reversing some of the metal’s earlier losses that had come amid signs of progress on trade agreements with the EU and Japan.
Fed Holds Firm, Dims Prospect of Rate Cut
The Federal Reserve kept its benchmark interest rate in the range of 4.25%–4.50% following a 9-2 vote. While markets had previously priced in a potential rate reduction in September, that expectation faded after Fed Chair Jerome Powell offered no specifics on when easing might begin.
Dissenting opinions from Governors Michelle Bowman and Christopher Waller highlighted internal disagreements on policy direction.
With investors now pushing back expectations for a rate cut into late 2025, gold’s upside remained limited. The precious metal tends to lose appeal in high-rate environments, as it doesn’t yield interest.
Copper Hit Hard as Tariff Exclusions Shock Market
U.S. copper prices took a major hit, plunging after the announcement that refined copper would be left out of Trump’s incoming 50% import tariff. Copper futures on the London Metal Exchange dipped 0.3% to $9,683.15 a ton, but U.S. copper futures nosedived 4.2% to $4.43 a pound.
The sharp fall came after a dramatic 19% drop on Wednesday—“the largest ever intraday decline”—triggered by the surprise exclusion of refined copper from new tariffs. Starting August 1, the 50% duty will apply to semi-finished copper products and copper-heavy goods, but not raw materials like ores, concentrates, or cathodes.
“Trump’s first musings of a tariff on copper imports back in January unleashed record shipments of the metal to American ports,” ING analysts said.
“There is now an excess inventory in the US, and that stockpile might now be re-exported,” they added.
Other Metals Mixed
Elsewhere in the metals market, platinum futures advanced 1.8% to $1,339.05 an ounce. Silver futures, however, declined 1.4% to $37.218 per ounce, reflecting the broader market volatility amid shifting economic and trade dynamics.
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.
Leave a Reply