Safe-haven rush lifts gold on tariff turmoil, Fed cut hopes
Gold edged higher on Thursday as renewed trade tensions sparked by steep U.S. tariffs boosted safe-haven demand, while a weaker dollar and growing interest-rate cut bets added to the bullion's appeal.
Spot gold was up 0.4% at $3,380.81 per ounce as of 0851 GMT. U.S. gold futures gained 0.6% to $3,454.80.
U.S. President Donald Trump's latest wave of tariff hikes, ranging from 10% to 50% and targeting dozens of countries, took effect on Thursday, testing the limits of his aggressive trade strategy.
Trump also announced a 100% tariff on imported semiconductors, though exemptions would apply to firms that manufacture or commit to manufacturing in the U.S.
The dollar (.DXY), opens new tab fell 0.2%, dropping to a 1-1/2-week low, making gold less expensive for other currency holders.
"Uncertainty is back in focus, especially with the latest developments on the tariff front, which is reviving safe-haven demand. We are also seeing support from broader macro sentiment, particularly with a softer U.S. dollar and growing expectations of Fed rate cuts," said ANZ Commodity Strategist Soni Kumari.
"Tariffs remain a key catalyst, but the bigger trigger will be how the U.S. economy performs. If we see a significant slowdown in the second half, that could push gold toward our target of $3,500 by September."
The Federal Reserve may need to cut rates in the near-term in response to a slowing U.S. economy, Minneapolis Fed President Neel Kashkari said. According to the CME FedWatch tool, opens new tab, markets are now pricing in a 93% chance of a 25-basis-point rate cut in September.
Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.
"We still see some upward pressure on gold prices extending out through the end of 2026," NAB analysts said in a note, forecasting average prices of $3,220/oz in 2025 and $3,475/oz in 2026.
Elsewhere, spot silver rose 0.9% to $38.20 per ounce, platinum was down 0.7% to $1,324.40 and palladium gained 1.8% to $1,152.46.
Source: Reuters
