Gold Eases as Trump Pauses EU Tariff Threat, But Weak Dollar and Stagflation Fears Lend Support

Gold prices slipped modestly in Asian trading on Monday, pulling back from last week’s gains after U.S. President Donald Trump over the weekend backed off from his threat to immediately impose 50% tariffs on the European Union.

Spot gold dipped 0.2% to $3,349.45 an ounce, while gold futures for June fell 0.5% to $3,376.91/oz by 00:54 ET (04:54 GMT).

The slight retreat in gold comes as risk sentiment steadied following Trump’s surprise Sunday announcement, which he said reflected “positive dialogue” with European Commission President Ursula von der Leyen. The White House confirmed that the proposed 50% tariffs will now be postponed until early July, giving room for further trade talks.

This decision marks yet another policy reversal from Trump, who had stoked market jitters on Friday by warning of sweeping tariffs on the EU set to take effect in June. Investors remain wary, given Trump’s pattern of abrupt policy shifts, with traders bracing for volatility as his July 9 deadline for tariffs on major trading partners looms.

While Trump’s tariff delay temporarily eased pressure on risk assets, gold’s downside was limited by broader concerns over the U.S. fiscal position. Persistent dollar weakness, coupled with a steady selloff in Treasuries, helped underpin the yellow metal. The dollar index fell 0.3% in Asian trading, extending losses from recent weeks as worries grow over America’s ballooning debt burden.

Stagflation fears added another layer of support for gold. Minneapolis Federal Reserve President Neel Kashkari warned over the weekend that Trump’s tariffs risk triggering a stagflationary scenario—higher inflation paired with weaker growth—and suggested the Fed is unlikely to adjust rates before September.

Kashkari’s remarks, combined with his warning about elevated economic uncertainty, kept safe haven demand for gold alive, even as prices retreated slightly on Monday.

Broader Metal Complex Gains on Dollar Weakness

Other precious metals edged higher on the back of dollar softness.

• Platinum futures rose 0.7% to $1,095.90/oz
• Silver futures advanced 0.3% to $33.690/oz

Industrial metals also found some support, though markets remained cautious amid uncertainty surrounding Trump’s trade policies and global economic prospects.

Outlook: Gold’s Resilience Hinges on U.S. Policy Path

Gold has rallied sharply this year, recently touching a record high of $3,500/oz, driven by fears of a global trade war, persistent U.S. debt concerns, and volatile policy signals from the Trump administration.

While the weekend’s tariff delay offers short-term relief, traders remain cautious ahead of the July 9 deadline and the potential for new trade shocks—particularly Trump’s threat to impose levies on smartphone imports.

The Fed’s wait-and-see stance on rates, alongside a weaker dollar and elevated geopolitical risks, continues to provide a floor under gold prices.

For now, the market’s focus remains on Trump’s evolving trade agenda, U.S. debt sustainability, and the stagflation debate—all of which could dictate the next leg of gold’s rally or retracement.