Gold pares losses after Trump levies 25% tariffs on Japan, South Korea
Gold prices pared earlier losses on Monday after U.S. President Donald Trump announced a 25% tariff on goods from Japan and South Korea starting August 1, prompting some safe-haven interest, though a strong U.S. dollar continued to add pressure on the yellow metal.
Having initially slid more than 1% on a strong U.S. dollar, spot gold recovered to be down 0.1% at $3,332.62 an ounce by 0149 p.m. EDT (1749 GMT).
U.S. gold futures were little changed, settling at $3,342.8.
The stronger dollar, up 0.4% against a basket of other major currencies, makes dollar-priced gold more expensive for buyers with other currencies.
"Gold is edging higher in reaction to Trump's 25% tariffs on Korea and Japan," said Tai Wong, an independent metals trader.
"The rest of the complex reacting the opposite way. Stocks are sliding a bit."
Major stock indexes declined after Trump slapped tariffs on Japan, South Korea as investors await further announcements in the White House's trade negotiations.
Minutes of the Fed's latest policy meeting and speeches by several Fed officials are due this week for further insights into the central bank's policy path.
Elsewhere, China's central bank added gold to its reserves in June for an eighth consecutive month, official data from the People's Bank of China (PBOC) showed on Monday.
"The PBoC in particular has been diversifying foreign exchange reserves substantially and an uptick in uncertainty and geopolitical risk may speed up the process," said Zain Vawda, analyst at MarketPulse by OANDA.
Bank of America in a note said central banks are buying gold to diversify reserves, reduce reliance on the U.S. dollar, and hedge against inflation and economic uncertainty, adding that it expects the trend to continue.
In other precious metals, spot silver edged 0.5% lower to $36.72 an ounce, platinum slipped 1.9% to $1,365.56 and palladium lost 2.5% to $1,106.96.
Source : Reuters
