Gold prices fell modestly in Asian trading on Monday after U.S. President Donald Trump postponed his plan to impose steep tariffs on European Union imports. Spot gold dipped 0.2% to $3,349.45 an ounce, while June gold futures slid 0.5% to $3,376.91/oz by early morning.
Trump’s Sunday night announcement—citing “constructive dialogue” with EU President Ursula von der Leyen—came just two days after threatening to implement 50% tariffs on EU goods. His decision to delay the move until early July provided some relief for risk assets but left markets cautious.
- The tariff reprieve did little to dispel broader market uncertainty around Trump’s trade agenda.
- Tariffs on smartphones and other major imports are still on the table, potentially escalating tensions.
The uncertain trade policy has sparked wild price swings in gold this year, with the metal hitting an all-time high of $3,500/oz earlier in May.
Fed’s Kashkari Warns of Stagflation Risk
Minneapolis Fed President Neel Kashkari added to market jitters, warning that Trump’s tariff threats could trigger stagflation—combining slowing growth with rising prices. He suggested the Federal Reserve was unlikely to adjust rates before September, citing ongoing economic instability.
- The dollar fell 0.3% in Asian trading, pressured by Kashkari’s comments and a U.S.-UK holiday.
- Treasury yields weakened, reflecting deepening investor concern over U.S. fiscal health and rising debt levels.
Persistent dollar weakness provided limited support for gold, though the metal’s safe-haven appeal was partially undercut by signs of easing trade tensions.
Broader Metals Advance Amid Dollar Weakness
Other precious metals found modest gains against the backdrop of a softer greenback:
- Platinum futures climbed 0.7% to $1,095.90/oz.
- Silver futures rose 0.3% to $33.690/oz.
Despite Monday’s pullback, gold’s recent strength has been fueled by investor skepticism over the U.S. administration’s trade strategies. Trump’s latest delay echoes a year-long pattern of shifting policy pronouncements, keeping traders on edge.
In summary, while gold prices slipped as immediate tariff fears eased, ongoing concerns about U.S. fiscal policy and the Fed’s warnings of stagflation risk continue to shape market sentiment. Unless there is greater clarity on trade and economic policy, gold’s safe-haven role may remain a key focus for investors.