Gold Recovers as Tariff Tensions Fuel Safe-Haven Demand

Highlights:

• Spot gold pared losses to trade at US$3,330.04/oz at the time of writing.
• Trump announced 25% tariffs on Japan and South Korea, effective August 1.
• Bullion remains up 25% this year amid geopolitical and trade concerns.

Trump’s Trade Threats Reignite Market Uncertainty

Gold prices rebounded slightly after U.S. President Donald Trump announced new tariffs targeting Japan and South Korea, adding to the volatility surrounding global trade. At the time of writing, spot gold was down 0.2% to US$3,330.04 an ounce, trimming earlier losses of up to 1.2%.

Trump stated via a Truth Social post that 25% tariffs would be imposed on goods from the two Asian nations starting August 1, unless they move swiftly to open their markets and boost U.S.-based manufacturing. The announcement is part of a broader push to reshape U.S. trade policy, with more such actions expected in the coming weeks.

Dollar Strength Pressures Metals, But Gold Holds Firm

Gold initially fell after Trump’s post also hinted at a further 10% tariff on countries aligned with the BRICS bloc, which pushed the U.S. dollar higher. A stronger dollar usually weighs on gold by making it more expensive in non-dollar currencies. The Bloomberg Dollar Spot Index rose 0.5% in response.

Despite the temporary dip, gold remains up more than 25% year-to-date, supported by ongoing global uncertainty, central bank purchases, and inflows into bullion-backed exchange-traded funds. Treasury Secretary Scott Bessent indicated that there may be room for negotiation before the tariffs take effect, slightly easing immediate concerns.

Investors Turn to Safe-Haven Amid Tensions

With geopolitical and trade risks elevated, investors are increasingly turning to gold as a safe-haven. Although silver, platinum, and palladium all fell in the latest session, gold's resilience highlights its role as a preferred hedge during periods of economic instability.

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