Overview
Gold prices experienced a notable increase during Asian trading on Tuesday, driven by safe-haven demand amid looming tariff uncertainties and a weaker U.S. dollar. Spot Gold rose by 0.8% to $3,328.71 per ounce, while Gold Futures for August saw a 1% increase, reaching $3,339.70 per ounce. This uptick followed a 1.5% rise on Monday, which helped recover losses incurred from the previous week’s ceasefire between Israel and Iran.
Tariff Deadline and Investor Behavior
The rise in gold prices is attributed to investor anxiety surrounding trade agreements as the July 9 tariff deadline approaches. A 90-day pause on tariffs initiated on April 2 has only resulted in two secured deals with China and the UK. Countries that fail to reach agreements face potential tariffs of up to 50%. Reports indicate that U.S. officials are now pursuing narrower agreements to achieve quick wins, while still contemplating tariffs on critical sectors.
President Trump has also threatened to impose tariffs on Tokyo, and Treasury Secretary Scott Bessent has indicated that significant tariff hikes could occur even amidst ongoing negotiations. This uncertainty regarding trade outcomes and the potential for new sectoral tariffs has prompted investors to seek refuge in safe-haven assets like gold.
Impact of Dollar Depreciation
The U.S. Dollar Index remained subdued, hovering near three-year lows, which further fueled the rise in gold and other precious metals. Silver Futures increased by 0.4% to $36.00 per ounce, while Platinum Futures saw a slight decline of 0.4% to $1,360.45. Additionally, London Copper Futures gained 0.2% to $9,839.95 per ton, and U.S. Copper Futures surged by 1.2% to $5.1145 per pound. The rise in copper prices was supported by unexpected growth in China’s Caixin PMI for June, reflecting improved trade conditions in the world’s largest copper importer.