Gold Prices Jump Amid Trade Uncertainty and Weaker Dollar

Gold Surges as Safe-Haven Demand Increases

Gold prices saw a notable increase in Asian trade on Tuesday, driven by heightened safe-haven demand due to rising uncertainty surrounding U.S. trade negotiations and concerns over President Donald Trump’s upcoming tariff deadline. Spot gold rose 0.8%, reaching $3,328.71 per ounce, while Gold Futures for August climbed 1%, reaching $3,339.70 per ounce by 02:10 ET (06:10 GMT).

This rise follows a 1.5% increase in gold prices the previous day, and the metal was on track to recover much of the ground it lost last week following the announcement of the Israel-Iran ceasefire. Investors are flocking to gold and other safe-haven assets as uncertainty over the trade landscape, coupled with the expiration of the 90-day tariff enforcement pause, creates turbulence in markets.

Trade Talks Looming: U.S. Tariff Deadline Approaches

With the deadline for U.S. tariff negotiations rapidly approaching on July 9, investor anxiety has risen. The 90-day tariff pause that began in April is set to expire next week, with the U.S. securing only two trade deals so far — with China and the UK. If other nations fail to reach agreements before the deadline, they face the re-imposition of tariffs as high as 50%.

A report from the Financial Times on Tuesday revealed that U.S. trade officials are now turning to narrower trade agreements, aiming for quick wins before the July 9 deadline. This shift in strategy, coupled with the continued possibility of new tariffs on key sectors, has driven concerns about the potential economic fallout, prompting investors to seek refuge in gold.

President Trump has also added fuel to the fire, threatening fresh tariffs on Japan and indicating that nations could still face steep tariff hikes even amid ongoing negotiations. Treasury Secretary Scott Bessent further warned that nations could experience substantial tariff increases, even as negotiations continue in good faith. This has led to greater uncertainty regarding trade outcomes, further fueling demand for gold as a hedge against risk.

A Weakening Dollar Boosts Gold and Other Precious Metals

In addition to geopolitical and trade concerns, gold prices also received support from a weaker U.S. dollar. The U.S. Dollar Index remained subdued during Asian trading hours, hovering near three-year lows. A weaker dollar makes gold and other commodities more affordable for foreign buyers, further increasing demand for the precious metal.

Other Precious Metals See Mixed Performance

Other precious metals also saw mixed movements. Silver Futures rose 0.4%, reaching $36.00 per ounce, supported by the broader risk-off sentiment. Platinum Futures, however, fell 0.4% to $1,360.45 per ounce, showing some weakness despite gold’s rally.

Meanwhile, copper prices saw a modest rise, with benchmark Copper Futures on the London Metal Exchange rising 0.2% to $9,839.95 per ton. U.S. Copper Futures jumped 1.2% to $5.1145 per pound. The gains in copper were supported by a private survey showing unexpected growth in China’s Caixin PMI for June, as improved trade conditions boosted sentiment in the world’s largest copper importer.

Outlook for Gold and Precious Metals

With the U.S. trade deadline fast approaching and global trade tensions still unresolved, gold is likely to remain in demand as a safe-haven asset. Market participants will be watching closely for any developments in trade talks, as well as any further moves by the Federal Reserve regarding interest rates. The growing uncertainty around tariffs, coupled with a weaker U.S. dollar, suggests that precious metals, particularly gold, may continue to see upward pressure in the near term.

In the coming weeks, all eyes will be on the potential impacts of the U.S. tariff decisions and the ongoing geopolitical dynamics in the Middle East. Investors are likely to remain cautious, with many seeking to shield their portfolios from the volatility in global markets by turning to precious metals.