Tariffs vs Interest Rates: Is Gold a Victim or a Protector?
Global gold prices stabilized on Friday morning, after posting two consecutive days of gains. Spot gold traded at $3,332.31 per ounce at 8:32 a.m. Singapore time, up 0.3% compared to the previous session. This increase occurred amid growing market concerns over President Donald Trump's threat of new tariffs, as well as speculation about the still-uncertain direction of US interest rates.
Trump has again shaken the market with his proposal for a series of new import tariffs on certain countries, including Canada and Brazil, as well as a major plan to impose tariffs on copper imports. These policies are scheduled to take effect on August 1. These moves have created considerable uncertainty in global markets and fueled investor interest in safe-haven assets like gold.
Meanwhile, market participants are also closely monitoring the outlook for US monetary policy. Although interest rates have remained unchanged this year, Fed officials are divided on the next direction. San Francisco Federal Reserve President Mary Daly has suggested two more rate cuts are still possible in the second half of 2025, although she believes the price impact of tariffs could be less severe than feared. Historically, falling interest rates have typically supported gold prices.
So far, gold has risen more than 25% through 2025, reaching a record high above $3,500 per ounce last April. The price increase was driven by geopolitical tensions, central bank buying, and long-term concerns about the global economy stemming from Trump's uncertain trade policies. With the combination of policy and geopolitical pressures, gold is expected to maintain its appeal as a hedge.
Source: (ayu-newsmaker)
