Gold experiences a decline due to optimistic trade developments
In the ever-evolving landscape of global trade, recent developments in President Trump's tariff policies have continued to cast a long shadow over financial markets. As we approach early July 2025, the status of trade deals and tariff changes announced by the President involves several adjustments and delays.
On June 3, 2025, President Trump issued a proclamation adjusting the Section 232 steel and aluminum tariff rates, along with amendments to Executive Order 14289. Reciprocal tariffs involving the EU and other countries have experienced multiple delays past their initially threatened start dates. For instance, tariffs that were to start on June 1 and July 9 have been postponed further into July and August 2025.
The Trump administration imposed additional duties ranging from 4.4% to 50% on about €8 billion worth of EU goods, with implementation delayed to mid-July and mid-August. On April 9, 2025, the Trump administration announced a 90-day pause on nearly all country-specific reciprocal tariffs, reducing them to 10% during that period. As of early July, reports indicate that the Trump team has again moved the deadlines and conditions related to tariff negotiations, creating ongoing uncertainty.
These shifting sands of trade policy have not gone unnoticed by market analysts. Kelvin Wong, market analyst at OANDA, expects another round of price movement around the $3320 level for gold, while Wong also identifies $3360 as the upper side resistance for gold. These predictions underscore the potential for increased volatility and possible upward pressure on gold prices due to the trade uncertainty.
However, it's important to note that direct data for 2025 regarding the specific impact on gold prices is not provided in the results. Nonetheless, in general, trade tensions and tariff uncertainties like those created by shifting deadlines and tariff adjustments typically increase market volatility and can lead investors to seek safe-haven assets such as gold.
In the world of precious metals, gold prices continue to show intraday weakness due to the short-term reprieve in tariff-related decisions, with spot gold falling 0.8% to $3306.85 an ounce. Futures markets now show that traders no longer expect a Fed rate cut this month, and traders are pricing in a total of just two quarter-point reductions for the end of the year.
Other precious metals have also felt the heat of the trade tensions. Platinum retreated 2% to $1363.39, while spot silver fell 1.1% to $36.52 an ounce. Palladium lost 2% to $1112.53.
In conclusion, President Trump's trade tariff policies remain in flux with ongoing delays and adjustments, contributing to economic uncertainty that typically influences markets including gold. As the situation continues to unfold, investors and analysts alike will be keeping a keen eye on the precious metals market for any signs of movement in response to these developments.
- Amidst the ongoing delays and adjustments in President Trump's trade tariff policies, recent news suggests that market analysts, such as Kelvin Wong from OANDA, anticipate increased volatility in the gold market, with potential upward pressure on gold prices due to trade uncertainties.
- The ongoing shifts in trade tariff policies have not only been a talking point in finance but also in the realm of investing, as these uncertainties often lead investors to consider safe-haven assets like gold, such as in the case of the precious metals market, where gold prices are closely monitored for any signs of movement in response to these developments in finance and technology.
