Tariffs Go Crazy, Dollar Strengthens, But Gold Remains Resilient
Gold prices moved steadily on Tuesday (8/7), after reversing sharp losses in the previous session. This stability was triggered by market concerns about increasing global trade tensions after US President Donald Trump announced new tariffs of 25% on Japan and South Korea. This move encouraged investors to return to safe haven assets such as gold, although the strengthening US dollar put pressure on the price of the precious metal.
What happened? Trump stated that Asian countries, including Japan and South Korea, would be subject to 25% tariffs on a number of exports to the US. Additional tariffs on other trading partner countries will also be announced, unless these countries reach an agreement with the US. However, Trump extended the deadline for implementing the tariffs until August 1, giving three additional weeks for affected countries to respond or negotiate.
Why is this important? The uncertainty of US trade policy has been a major factor shaking the global market. Concerns about the negative impact on world economic growth have encouraged investors to seek protection in instruments such as gold bullion. Despite a 1.2% drop earlier in the week, gold was steady at $3,337.30 an ounce as of 7:15 a.m. Singapore time. However, a stronger U.S. dollar—which usually makes gold more expensive for international buyers—limited further gains.
How is this affecting other precious metals markets? Silver and palladium were reported to be steady, while platinum was slightly lower. The Bloomberg Dollar Spot Index rose 0.5% on Monday but fell 0.1% on Tuesday, indicating that high volatility is still looming in currency and commodity markets. With tariff and geopolitical tensions still developing, gold prices are expected to continue to find support as a safe-haven asset.
Source: (ayu-newsmaker)
