Gold Prices Stable Amid Escalating Trade Tensions and Dollar Strength

Gold prices remained stable during trading on Tuesday, July 8, influenced by President Donald Trump's decision to increase tariffs on imports from Japan, South Korea, and other countries, while the dollar rose and US Treasury bond yields limited gains for the yellow metal.

Spot gold price was $3331.07 per ounce, while US gold futures held at $3340.70. This trading followed Trump's announcement of the new tariffs taking effect on August 1, as part of a new escalation in the global trade war.

Trump confirmed the set deadline but left room for extensions for countries presenting "acceptable proposals". The mutual tariffs were reduced to 10% until July 9 to facilitate negotiations, but agreements have only been reached with the UK and Vietnam so far.

Tim Waterer, senior market analysts at "KCM Trade", commented: "Trump's recent tariff messages keep gold in focus as a safe haven, but the strength of the dollar and rising yields restrict its direct ascent".

The yield on the US ten-year Treasury bonds remained near a two-week high, while the dollar maintained its stability after a previous rise. Rising yields increase the opportunity cost of holding gold, and a stronger dollar makes the precious metal more expensive for investors outside the US.

Waterer added: "Traders currently seem unconcerned with Trump's statements, and with demand for safe havens limited, gold awaits a catalyst for a bullish breakthrough".

Trump's trade policies have also raised concerns about an inflationary wave, complicating the Federal Reserve's path towards interest rate cuts. The minutes of the Fed's June meeting, scheduled for release on Wednesday, are expected to provide clearer hints about future monetary policy.

Outside of gold, silver prices fell by 0.1% to $36.78 per ounce, while platinum rose by 0.6% to $1379.29, and palladium increased by 1% to $1170.46.