Gold prices edged slightly higher on Thursday, supported by growing demand for safe haven assets following new tariff threats from U.S. President Donald Trump, along with weak U.S. economic data that bolstered expectations of interest rate cuts by the Federal Reserve.
Spot gold rose by 0.1% to $3,373.80 per ounce, while December gold futures climbed 0.4% to $3,447.90 per ounce.
Investor appetite for the precious metal was boosted after Trump announced plans to impose a 100% tariff on semiconductor imports from certain countries unless they invest in chip manufacturing within the United States. The move aims to strengthen domestic production but has raised concerns over further disruptions in global supply chains and rising inflation.
Trump also signed an order to double tariffs on imports from India to 50%, citing New Delhi’s purchase of Russian oil. In a post on the “Truth Social” platform, Trump confirmed that the new tariffs would take effect at midnight, further heightening investor concerns.
Expectations of higher production costs and escalating trade tensions have increased demand for gold, which is considered a safe haven against inflation and market volatility.
At the same time, the precious metal received additional support from growing bets that the Federal Reserve will begin cutting interest rates by September. Data released this week showed a slowdown in the U.S. services sector in July, following last week’s weak non farm payroll figures.
Weekly jobless claims data is also due later, with expectations pointing to an increase of 3,000 in initial claims, reaching 221,000 for the week ending August 2 reinforcing the impression of a slowdown in the U.S. economy.
According to the CME Group’s FedWatch tool, markets are now pricing in a 95% chance of a rate cut in September. Lower interest rates are seen as positive for gold, as they reduce the opportunity cost of holding non yielding assets like the precious metal, while also weakening the dollar making gold relatively cheaper for foreign investors.
In other metals markets, platinum futures rose 1% to $1,353.70 per ounce, while silver futures jumped 0.9% to $38.250 per ounce.
London Metal Exchange benchmark copper contracts rose 0.3% to $9,719.20 per metric ton, while U.S. copper futures climbed 0.5% to $4.4328 per pound.
This came as investors assessed Chinese trade balance data, which showed a rise in exports amid signs of improving trade relations between the U.S. and China.
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