Gold prices fell modestly in Asian markets on Wednesday as investors showed little appetite for the metal as a safe haven. Instead, uncertainty around U.S. trade tariffs and Federal Reserve interest rate policy boosted demand for the U.S. dollar, pressuring gold and other metals.
In contrast, U.S. copper prices surged to unprecedented levels after President Donald Trump announced plans to impose a hefty 50% tariff on imported copper. This announcement sent copper futures in the U.S. sharply higher, even as London Metal Exchange copper prices dropped on Tuesday and Wednesday.
The stronger dollar, recovering from recent three-year lows, weighed heavily on the broader metals complex, contributing to a general pullback in prices. Market sentiment favored the greenback following strong U.S. jobs data, which diminished expectations for imminent interest rate cuts by the Federal Reserve.
Spot gold declined 0.2% to $3,294.88 per ounce, with September gold futures slipping 0.4% to $3,303.20 per ounce as of early Wednesday morning (ET). Gold prices hovered near their lowest level in over a week as fears about trade tensions failed to trigger typical safe-haven buying.
Investors moved into the discounted dollar, which gained momentum amid concerns over escalating tariff measures. The U.S. administration began sending official tariff notices targeting several major trading partners this week, fueling market caution.
The Federal Reserve has warned that if tariffs reach their full intended levels, inflationary pressures could rise in the U.S., making it less likely the central bank will cut rates soon. This outlook weighed on precious metals, which had seen strong gains in June and were now experiencing some profit-taking.
Platinum futures dropped 1.1% to $1,376.35 per ounce, while silver futures edged up slightly to $36.84 per ounce amid mixed market dynamics.
Copper in the U.S. climbed sharply amid expectations of tighter supply conditions resulting from tariffs. U.S. copper futures rose 2.6% to $5.6457 per pound on Wednesday after hitting an all-time high of $5.8955 on Tuesday. Domestic producers like Freeport-McMoRan are poised to benefit from the tariff, which aims to bolster local mining and reduce import dependency.
Copper’s importance has grown substantially due to its role in electrical transmission and the electric vehicle industry—key elements of the global transition to cleaner energy.
Outside the U.S., copper prices declined amid concerns about weakening demand from China, the world’s largest copper importer. London Metal Exchange copper futures fell 1.6% to $9,644.45 per ton, near a three-week low, as China’s mixed inflation data added to worries over future demand.