Gold Slips Slightly in Asia, But Haven Demand Remains Strong Amid Tariff and Rate Uncertainty
Gold prices edged down during Asian trading hours on Tuesday, easing slightly after hitting a one-month high in the previous session. Ongoing concerns over U.S. tariffs and interest rate policy continued to fuel strong demand for safe-haven assets.
The metal had gained earlier following news that the European Union was preparing retaliatory tariffs in response to President Donald Trump’s proposed levies. Washington is reportedly aiming for at least a 15% tariff on EU goods, further intensifying trade tensions.
Meanwhile, growing uncertainty around U.S. monetary policy also bolstered safe-haven appetite. With the Federal Reserve set to meet next week, most analysts expect interest rates to remain unchanged, despite Trump’s public push for an immediate rate cut.
As of 00:38 ET (04:38 GMT), spot gold dipped 0.2% to $3,389.39 per ounce, while gold futures were down 0.1% at $3,402.00. On Monday, spot prices had surged 1.4%, nearing the $3,400 mark.
Tariff Anxiety Builds Ahead of August 1 Deadline
Investor sentiment remained fragile as the August 1 deadline for new U.S. tariffs loomed closer. Hopes for a trade agreement between the U.S. and EU have faded, prompting fears of a full-blown trade war.
The EU is reportedly preparing countermeasures, especially as Trump’s proposed tariffs may exceed earlier expectations. With few trade agreements reached in recent weeks, markets are bracing for the full implementation of Trump’s tariff strategy.
The White House also appears unlikely to extend the August 1 deadline, further spooking markets. Trump has recently issued a series of letters detailing potential tariffs ranging from 20% to 50% on several major trade partners, drawing sharp responses and retaliatory threats.
This environment of economic uncertainty has strengthened demand for precious metals, though silver and platinum have outperformed gold in recent months. On Tuesday, however, both faced some pressure:
- Spot silver declined 0.5% to $38.7365/oz
- Spot platinum slipped 0.1% to $1,452.38/oz
Copper Drops Ahead of Incoming Tariffs
Industrial metals were also under pressure. Copper futures dipped amid concerns over tariffs targeting the commodity:
- LME copper fell 0.4% to $9,829.85 per ton
- COMEX copper dropped 0.9% to $5.5900 per pound
A 50% U.S. tariff on copper is also set to go into effect on August 1.
Dollar Weakens Slightly as Fed Meeting Looms
Gold’s rally on Monday was also helped by a mild pullback in the U.S. dollar, which had previously logged two consecutive weeks of gains. Despite this dip, the dollar remains supported by widespread expectations that the Federal Reserve will hold rates steady at next week’s meeting.
However, concerns are rising about the Fed’s independence amid speculation that Trump could attempt to remove Fed Chair Jerome Powell. Powell has thus far resisted pressure to cut rates, which has drawn criticism from the administration.
Powell is scheduled to speak later Tuesday, although it’s unclear if he’ll address monetary policy, as the Fed is currently observing its pre-meeting media blackout.
Adding to the pressure, reports suggest Powell may also face scrutiny over a cost overrun in the Fed’s headquarters renovation project.
