Gold prices edged higher in early Asian trading on Monday, driven by rising investor caution over impending U.S. trade tariffs and Japan’s shifting political landscape following a key election result.
The precious metal gained modestly as markets digested the weekend’s upper house elections in Japan, where Prime Minister Shigeru Ishiba’s Liberal Democratic Party (LDP) failed to retain its majority. The outcome casts doubt on Japan’s near-term policy direction, prompting investors to seek safer assets. The yen strengthened in response, reflecting a classic flight to quality.
A slight dip in the U.S. dollar, following two weeks of upward momentum, also contributed to support for gold and other metals, even as bullion remains confined to a familiar $200 range it has traded in since April.
Spot gold rose 0.4% to $3,364.21 per ounce, and September gold futures climbed 0.4% to $3,371.42/oz by 01:20 ET (05:20 GMT).
Geopolitical Tensions and Trade Fears Drive Haven Demand
Fresh concerns over U.S. trade policy added fuel to gold’s advance. A Wall Street Journal article published Sunday revealed that the European Union is preparing retaliation in response to U.S. President Donald Trump’s planned tariff hikes.
According to the report, U.S. officials have requested additional concessions from the EU, including a 15% baseline tariff—much higher than expected—unsettling European negotiators.
The article emphasized the market’s unease ahead of the August 1 implementation date. “August 1 was a hard deadline for the tariffs,” U.S. Commerce Secretary Howard Lutnick reiterated on Sunday, noting the new duties could range from 20% to 50%.
Japan’s Election Adds to Uncertainty
Gold’s appeal was also strengthened by political risk in Japan, where the LDP’s upper house defeat raised concerns about the government’s ability to pass economic reforms and negotiate trade terms with the U.S.
The loss introduces new uncertainty into Japan’s economic strategy and could complicate its trade positioning just as global tensions escalate.
Platinum and Silver Continue Strong Run
Other precious metals extended their impressive 2025 gains. Spot platinum jumped 1% to $1,439.59/oz, while silver added 0.3% to $38.3045/oz. Both metals have outperformed gold this year, supported by stronger demand signals and expectations of supply constraints.
Silver and platinum are now trading near multi-year highs—14 and 11 years respectively—benefiting from investor rotation into undervalued assets amid broader market jitters.
Copper Rises with Broader Metals
Industrial metals joined the rally, helped by a slightly weaker dollar and hopes for longer-term demand growth. LME copper futures rose 0.6% to $9,846.45 per ton, while COMEX copper edged up 0.2% to $5.6170 per pound.
Despite concerns over global trade disputes, copper’s strength suggests continued investor confidence in infrastructure-led growth and a rebound in industrial activity.
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