Gold prices steadied on Tuesday in Asia as safe-haven demand sparked by U.S. President Donald Trump’s tariff threats clashed with renewed dollar strength, limiting upside for metals.
Spot gold edged down to $3,334.22 an ounce, while September gold futures hovered flat at $3,343.70 by 01:22 ET (05:22 GMT). The yellow metal gained on Monday after Trump released letters imposing steep tariffs on major Asian and African economies but signaled potential for further trade negotiations.
Trump’s tariff letters included:
- 25% duties on South Korea, Japan, Malaysia, Kazakhstan
- 30% on South Africa
- 32% on Indonesia
- 35% on Bangladesh
- 36% on Thailand
Although the announcements initially rattled risk markets, Trump hinted flexibility on the August 1 deadline, boosting investor hopes for continued dialogue and curbing further risk aversion.
Dollar Gains Limit Gold’s Rally
While Trump’s tariffs briefly lifted gold, the U.S. dollar’s strength capped further upside. The greenback rebounded sharply after the tariff letters, maintaining gains from its recent bounce off three-year lows.
Strong U.S. economic data has reduced expectations of near-term Federal Reserve rate cuts, supporting the dollar. The CME FedWatch tool shows markets pricing a 92.4% chance of a quarter-point Fed rate cut, up from 70% a week prior, but traders remain cautious.
Dollar strength typically pressures gold, making it more expensive for non-dollar buyers. Despite this, gold prices remain within striking distance of the $3,500 record high hit earlier this year.
Metal Markets Eye Fed Minutes This Week
Other precious metals traded with modest gains:
- Platinum futures: up 0.1% to $1,383.75/oz
- Silver futures: up 0.3% to $37.008/oz
Both continue to hover near multi-year highs, driven by supply tightness and steady investment interest.
Among industrial metals:
- LME Copper: up 0.2% to $9,839.80/ton
- U.S. Copper futures: up 0.4% to $5.0260/lb
Investors now await the Federal Reserve’s June meeting minutes due later this week for further guidance on monetary policy direction. The Fed maintained a cautious stance in June, and markets are seeking clarity on whether the central bank will proceed with additional rate cuts amid ongoing geopolitical tensions and solid U.S. economic data.
