Gold prices are trending upward, recovering from previous losses and reaching a two-week high. This surge is fueled by a combination of factors, including renewed US tariff threats, weak US economic data, signs of a cooling labor market, and speculation surrounding potential interest rate cuts and changes in Federal Reserve leadership.
- Gold rose toward $3,380 per ounce.
- President Trump announced a 100% tariff on imported semiconductors and chips (excluding companies manufacturing in the US).
- A 25% tariff will be added to Indian imports.
- Duties on select Brazilian goods were raised to 50%.
- Disappointing US economic data and a cooling labor market reinforce expectations of rate cuts in September, with a second cut likely in December.
- President Trump is expected to nominate a successor for outgoing Fed Governor Adriana Kugler.
- Four finalists are under consideration to replace Fed Chair Jerome Powell, raising concerns about the central bank’s independence.
The confluence of these factors suggests a climate of economic uncertainty that is bolstering the appeal of gold. Trade tensions and anticipation of lower interest rates are making this non-yielding asset more attractive to investors. Additionally, potential changes in Federal Reserve leadership are adding another layer of uncertainty, further supporting demand for this safe-haven commodity.