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Gold prices surged in Asian trading on Tuesday as renewed U.S. tariff threats rekindled safe-haven demand for the yellow metal, while investors remained cautious ahead of the U.S. Federal Reserve’s closely watched policy decision later in the day.
As of 02:16 ET (06:16 GMT), spot gold rose 1% to $3,366.95 per ounce, while gold futures for June delivery jumped 1.5% to $3,373.75 an ounce. The advance builds on Monday’s sharp 3% rally, which erased most of last week’s losses. Gold remains near its record high of just above $3,500 an ounce, reached last month.
Fresh Tariff Announcements Stoke Safe-Haven Buying
Safe-haven flows into gold intensified after U.S. President Donald Trump signed an executive order on Monday aimed at bolstering domestic pharmaceutical production. The President also warned that new import tariffs targeting the pharmaceutical sector could be implemented within two weeks.
Adding to market jitters, Trump over the weekend ordered the imposition of a 100% tariff on all foreign-produced movies, further intensifying trade tensions with major U.S. partners.
While recent rhetoric from both Washington and Beijing pointed to potential trade talks, the introduction of new tariffs has cast doubt on the timeline and sincerity of negotiations. U.S. Treasury Secretary Scott Bessent told CNBC on Monday that he expects progress in talks “in the coming weeks,” but China has emphasized that any dialogue must be based on mutual respect and the removal of existing tariffs.
The uncertainty surrounding trade policy and its potential inflationary effects has pushed investors toward traditional safe-haven assets, particularly gold.
Fed in Focus
Markets are also turning their attention to the Federal Reserve, which begins its two-day policy meeting today. The central bank is widely expected to leave interest rates unchanged, maintaining a cautious stance as it monitors the impact of tariffs on the inflation outlook.
The Fed’s statement will be scrutinized for signals on future rate policy, especially given the economic crosswinds from trade disruptions and softening growth indicators.
The U.S. Dollar Index held steady in Asian trade, limiting gold’s upside but failing to derail bullish momentum.
Other Precious and Industrial Metals
Silver led gains among precious metals, with futures surging 2.4% to $33.275 an ounce. Platinum futures added 1% to $974.10 an ounce.
Copper prices also edged higher, supported by a softer U.S. dollar. Benchmark copper futures on the London Metal Exchange rose 0.7% to $9,462.65 a ton, while July copper contracts in the U.S. traded flat at $4.7093 a pound. Traders are now awaiting fresh Chinese trade data for further clarity on demand prospects in the world’s top metals consumer.
With geopolitical tensions rising and central banks in focus, gold appears poised to remain a key barometer of investor sentiment in the days ahead.
