Gold prices recovered in Thursday’s Asian session, bouncing off one-month lows as investors sought refuge from escalating trade tensions tied to looming U.S. tariffs. Growing anxiety ahead of President Donald Trump’s August 1 deadline for new trade levies reignited interest in the precious metal.
However, gold’s upside was restrained by the Federal Reserve’s latest policy decision, which held interest rates steady and suggested that a September rate cut is unlikely.
Spot gold climbed 0.8% to $3,301.21 an ounce, while gold futures hovered near the flatline at $3,352.70 per ounce by 02:08 ET (06:08 GMT). Prices had slumped earlier this week following hawkish messaging from the Fed, despite President Trump’s public criticism.
Gold Rallies as Markets Brace for Tariffs
The approaching deadline for U.S. trade tariffs, including a slew of new levies announced by Trump, dominated market sentiment. On Wednesday, he disclosed a trade pact with South Korea involving a 15% tariff on goods. India, which has yet to secure an agreement, will face a 25% tariff on exports to the U.S. starting Friday. Brazilian exports are now subject to tariffs reaching 50%.
A report from Politico revealed that “Trump will sign executive orders on Thursday imposing higher tariffs on countries that have failed to reach trade deals.”
Uncertainty around trade policy sparked renewed demand for gold as a safe haven, with investors looking to hedge against potential volatility. Optimism earlier in the week tied to progress on deals with the EU and Japan had briefly eased concerns.
Fed Holds Rates, Dampens Rate Cut Optimism
The U.S. central bank left interest rates unchanged at 4.25%–4.50% in a 9–2 vote. Fed Chair Jerome Powell declined to give any timeline for a potential rate reduction, disappointing investors who had hoped for a pivot.
Dissent within the Fed also emerged, as Governors Michelle Bowman and Christopher Waller—both of whom voted for a rate cut—highlighted concerns over a cooling labor market.
The lack of immediate policy easing weighed on gold’s performance, as higher interest rates typically reduce the appeal of non-yielding assets like bullion. Most traders have now pushed expectations for a cut further into 2025.
Copper Collapses After Tariff Exemption Surprise
U.S. copper prices plummeted on Wednesday after Trump unexpectedly excluded refined copper from a sweeping 50% tariff on imports. While London copper futures edged down 0.3% to $9,683.15 a ton, U.S. copper futures suffered a 4.2% drop to $4.43 a pound.
The exclusion triggered a historic 19% single-day loss in U.S. copper futures—the sharpest ever recorded—amid shock and confusion in the market.
The tariff, set to begin August 1, will target semi-finished copper goods and products with high copper content but leave out ores, concentrates, and refined 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.
Mixed Performance in Other Precious Metals
Platinum futures advanced 1.8% to $1,339.05 per ounce, while silver futures slid 1.4% to $37.218 per ounce, as the broader metals market responded to the dual impact of trade policy shifts and steady monetary policy.
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