Gold Edges Higher on Trade Tensions and Japan Political Uncertainty
Gold prices inched up in Asian trading on Monday, supported by safe-haven demand amid ongoing concerns over U.S. trade tariffs set to take effect in the coming weeks.
Meanwhile, Japan’s upper house elections over the weekend resulted in the Liberal Democratic Party (LDP) losing its majority, raising questions about the future stability of Japan’s government. In response, the yen strengthened, also reflecting a rise in haven flows.
A slight pullback in the U.S. dollar, after two weeks of gains, further helped lift precious metals. Still, gold remained range-bound, stuck within the same $200 window it has traded in since April.
Other precious metals, notably platinum and silver, outperformed gold due to ongoing expectations of tightening supply and stronger demand.
As of early trading:
- Spot gold rose 0.4% to $3,364.21/oz
- Gold futures (September) climbed 0.4% to $3,371.42/oz
Gold Gains as EU Prepares Response to U.S. Tariffs
Gold’s uptick followed a Wall Street Journal report on Sunday revealing that the European Union is preparing to retaliate against U.S. President Donald Trump’s tariffs.
U.S. negotiators are reportedly demanding significant concessions from the EU, including a 15% baseline tariff, which surprised European officials and cast further doubt on a trade deal.
The report added to uncertainty around U.S. trade policy, especially with the August 1 deadline for Trump’s new tariffs approaching. According to Commerce Secretary Howard Lutnick, these tariffs—ranging between 20% and 50%—will be enforced strictly.
Political instability in Japan also boosted haven demand, as the LDP’s loss in the upper house complicates both trade talks with the U.S. and Japan’s broader economic reform agenda.
Platinum and Silver Outperform, Approach Multi-Year Highs
The broader metal market also benefited from a weaker dollar.
- Spot platinum rose 1% to $1,439.59/oz, nearing its highest level in 11 years
- Spot silver gained 0.3% to $38.3045/oz, close to a 14-year high
So far in 2025:
- Platinum is up 29.2%
- Silver has surged 53.5%
- Gold has gained 28.4%
Strong performances in silver and platinum are being driven by bargain buying, along with tight supply expectations and signs of rising industrial demand.
Copper Also Rises on Industrial Demand
In industrial metals:
- LME copper futures rose 0.6% to $9,846.45/ton
- COMEX copper gained 0.2% to $5.6170/pound
