Gold Still Rising! Interest Rates Swing, Trump Adds More Tariffs!
Gold prices maintained slight gains today, trading near $3,318 per ounce, after rising 0.4% in Wednesday's trading. This rise occurred amid market focus on the prospect of a Federal Reserve (Fed) interest rate cut and uncertainty stemming from US President Donald Trump's threat of new tariffs. Traders also pored over the minutes of the latest Fed meeting, which revealed differing internal views regarding the impact of tariffs on inflation.
What happened? – Of the 19 Fed officials, 10 projected two rate cuts this year, while 7 predicted no cuts at all. The remaining two officials predicted only one cut. Because gold does not pay interest, a lower interest rate environment tends to support the price of the precious metal. That's why the prospect of a rate cut is an important factor being watched by the market right now.
Why is it important? When Trump announced another round of tariffs, including high tariffs on Brazil, trade tensions resurfaced. While short-term concerns have eased, long-term uncertainty remains a reason for investors to seek safe assets like gold. At the same time, US Treasury yields fell after the 10-year bond auction received a strong response from the market, strengthening gold's appeal as lower yields pressured alternative interest-bearing investments.
What impact has this had on the market? Spot gold edged up 0.1% to $3,317.41 per ounce at 8:05 a.m. Singapore time. The Bloomberg Dollar Index also weakened 0.1%, supporting gold's purchasing power globally. Meanwhile, silver and platinum prices remained stagnant, and palladium fell slightly. Throughout 2025, gold has rallied around 25%, driven by a combination of factors such as trade tensions, geopolitical conflicts, and massive buying by global central banks.
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