Gold edged up modestly on Thursday as investors sought safety in response to fresh tariff announcements from U.S. President Donald Trump and weak U.S. economic data, which revived hopes for an upcoming Federal Reserve interest rate cut.
At 04:30 ET (08:30 GMT), Spot Gold gained 0.1%, reaching $3,373.80 per ounce. Meanwhile, December Gold Futures climbed 0.4% to $3,447.90 per ounce.
Tariff Escalations Spark Market Concerns
Investor demand for gold increased after Trump declared plans to impose a 100% tariff on semiconductor imports from selected countries that do not invest in U.S.-based chip manufacturing. This initiative is intended to strengthen domestic production but raised worries about further disruptions to global supply chains and potential inflationary pressures.
In a related move, Trump signed an executive order doubling tariffs on imports from India to 50%, citing the country’s continued purchase of Russian oil. The tariffs, announced on Trump’s Truth Social platform late Wednesday, are set to take effect at midnight, injecting uncertainty into the markets.
These developments, combined with the threat of rising costs and intensified trade tensions, bolstered gold’s role as a reliable hedge against inflation and economic volatility.
Markets Eye Fed Rate Cuts
Gold also benefited from growing anticipation that the Federal Reserve will cut interest rates as early as September. Recent economic reports revealed a slowdown in the U.S. services sector for July, following disappointing nonfarm payroll figures last week.
The markets are awaiting weekly jobless claims data expected later in the day, with forecasts suggesting a slight increase of 3,000 claims to 221,000 for the week ending August 2, reinforcing concerns about a slowing U.S. economy.
According to CME’s FedWatch Tool, there is now a 95% probability that the Fed will reduce rates in September. Lower interest rates decrease the opportunity cost of holding gold, which does not pay interest, making it more appealing to investors.
Broader Metal Market Moves on China Trade Figures
Other metals saw upward movement as well: Platinum Futures rose 1% to $1,353.70 per ounce, and Silver Futures climbed 0.9% to $38.25 per ounce.
Copper prices gained on both sides of the Atlantic, with London Metal Exchange Copper Futures up 0.3% to $9,719.20 per ton and U.S. Copper Futures increasing 0.5% to $4.4328 per pound.
Investor optimism was further supported by Chinese trade data showing a strong export rebound, hinting at a potential easing in U.S.-China trade frictions.
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