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Gold prices saw modest gains on Thursday, remaining within a recently established trading range, while U.S. copper futures extended their rally after President Donald Trump’s confirmation of plans to impose tariffs on copper imports.
Gold’s Limited Safe Haven Demand Amid Trade Tariff Uncertainty
Spot gold rose by 0.3%, reaching $3,323.72 an ounce, while gold futures for September gained 0.3% to $3,332.45/oz by 01:34 ET (05:34 GMT). Gold’s performance remained relatively range-bound, with prices fluctuating between $3,300 and $3,450 per ounce. The yellow metal faced pressure from a stronger dollar, although it found some support from a softer greenback on Thursday.
Despite Trump’s tariff agenda, gold did not see significant safe haven demand, as the president released several letters outlining steep trade tariffs on major U.S. trading partners. However, Trump also postponed the effective date for the tariffs to August 1, which sustained some hopes that Washington would sign more trade deals, easing investor concerns.
Dollar Impact and Fed’s Rate Cut Uncertainty
Gold’s movements were influenced by the dollar’s fluctuations, particularly after the release of the Federal Reserve’s June meeting minutes. The minutes revealed that while a majority of policymakers supported a rate cut this year, there was division regarding the timing. Concerns over the inflationary impact of Trump’s tariffs on the U.S. economy were also noted, leading to uncertainty over the timing of further interest rate cuts.
Fed Chair Jerome Powell has reiterated that the uncertainty around Trump’s trade tariffs is a key factor in delaying rate cuts. Although gold prices faced pressure from the dollar’s strength, the potential for future Fed rate cuts kept investors on edge, with some turning to gold for a hedge against economic uncertainty.
Platinum and Silver Lead Precious Metals Rally
Other precious metals like platinum and silver outpaced gold in recent months. Platinum futures rose 0.3% to $1,387.60/oz, and silver futures climbed 0.2% to $36.710/oz, both remaining near multi-year peaks. The broader precious metals market saw strength, particularly with platinum and silver benefiting from growing industrial demand and geopolitical uncertainties.
Copper Prices Surge as Trump Imposes Tariffs
U.S. copper futures surged 1.4% to $5.6183 a pound, maintaining close proximity to the record high hit earlier in the week. Benchmark copper futures on the London Metal Exchange rose 0.5% to $9,687.10 a ton, recovering some of the losses seen after Trump’s announcement.
Trump stated that the U.S. would impose 50% tariffs on all copper imports, effective from August 1. This move is aimed at boosting domestic copper production, as the U.S. relies heavily on copper imports to meet its demand. While the tariff announcement initially caused a sell-off in copper markets, it also raised concerns about tighter copper supplies, driving the rally in U.S. copper prices.
The imposition of the 50% tariff is expected to crimp domestic copper supplies, as the U.S. imports at least half of its copper requirements. The uncertainty over the U.S. copper supply chain and the potential for reduced imports has pushed copper prices to new highs, with traders betting that domestic production will not be able to meet the demand.
Conclusion
While gold faces headwinds from a stronger dollar and limited safe haven demand, the broader metal markets, particularly copper, are being driven by new trade policies and tariff announcements. As the global economic landscape continues to shift, investors are closely watching the unfolding trade negotiations and the Federal Reserve’s policy stance, both of which are expected to influence metal prices in the coming weeks.
