Trump Plays With Tariffs, Gold Becomes Investors' Prey Amid Uncertainty
Global gold prices (XAU/USD) strengthened for the third consecutive day on Friday (July 12, 2025), approaching the upper limit of the weekly range. This strengthening was driven by escalating trade tensions after President Donald Trump issued new tariff notices against several major trading partners. The tariffs are scheduled to take effect on August 1, sparking global market concerns and increasing demand for safe-haven assets like gold.
Investors are currently monitoring the ongoing impact of US protectionist policies. Uncertainty over the potential for a large-scale trade war has led many market participants to shift funds to gold, which is considered a safer bet amid geopolitical pressures and the risk of a global economic slowdown. Gold, which does not provide a yield like bonds, remains a top choice when risk sentiment worsens.
However, on the monetary policy side, market participants are beginning to reduce expectations for a short-term interest rate cut by the Fed. This occurred following the release of strong US employment data last week, which showed a still solid labor market. As a result, the US dollar (USD) remained strong, even approaching its highest level in more than two weeks. This dollar strength limited gold's gains by making the precious metal more expensive for holders of other currencies.
Given these conditions, analysts recommend waiting for confirmation of further buying before taking an aggressive short-term bullish position on XAU/USD. As long as trade tensions continue to escalate without a clear policy direction from the Fed, gold prices are expected to remain volatile, supported by a cautious global sentiment.
Source: (ayu-newsmaker)
