Gold Prices Rise Amid Tariff Threats and Geopolitical Tensions

Gold prices rose in Asian trade on Friday, recovering some recent losses as safe-haven demand was boosted by U.S. President Donald Trump’s threats of more trade tariffs and ongoing geopolitical tensions in the Middle East.

Key Market Movements:

• Gold Prices: Spot gold rose 0.5% to $3,341.27 an ounce, while gold futures for September increased 0.9% to $3,354.60/oz by 01:28 ET (05:28 GMT).
• Silver and Platinum: Silver and platinum were on track for strong weekly gains, significantly outperforming gold. Both metals reached fresh multi-year highs this week, with silver rising 2.2% to $38.140/oz and platinum gaining 0.3% to $1,420.25/oz, approaching an 11-year high.
• Copper: U.S. copper futures fell 1.2% to $5.5620 a pound, driven by profit-taking after Trump’s tariff threat on the red metal earlier this week. Benchmark copper futures on the London Metal Exchange were flat at $9,700.55 a ton.

Trump’s Tariff Threats and Safe-Haven Demand:

• Canada Tariff Threat: Trump’s announcement on Thursday evening that he would impose a 35% tariff on Canada starting August 1 added to market uncertainty, sparking a risk-off move in global markets. This move was a surprise, as trade relations had shown signs of improving.
• Middle East Geopolitical Tensions: Continued escalation in the Israel-Hamas conflict, with little immediate progress towards a ceasefire, also contributed to heightened geopolitical risk, supporting demand for safe-haven assets like gold.
• Dollar Impact: Despite the rise in gold, the stronger U.S. dollar limited gains across most metals. Gold remained range-bound between $3,300/oz and $3,500/oz for most of the year, weighed down by speculation about the Federal Reserve’s interest rate path.

Platinum and Silver Outperform:

• Platinum’s Bullish Trend: Platinum prices have been rising for six consecutive weeks, benefiting from a bullish industry report released in May. Platinum’s performance, coupled with stronger demand and tighter supply, continues to support its upward trajectory.
• Silver’s Resilience: Silver prices saw a third consecutive week of gains, driven by strong demand and market optimism. The metal reached its highest level in nearly 14 years, outperforming gold amid increased speculative interest.

Outlook:

The market will likely continue to focus on Trump’s trade tariffs, U.S. economic data, and the evolving situation in the Middle East for further directional cues.

While gold remains supported by geopolitical tensions and tariff uncertainty, its upside is capped by the strong dollar and concerns over future U.S. interest rate decisions. Meanwhile, platinum and silver continue to benefit from improving fundamentals, including tighter supply and rising demand in industrial applications.