Gold rises as fresh Trump tariff threats dampen trade talk hopes

Gold edged higher on Wednesday (Jul 9) as US President Donald Trump’s latest tariff threats dampened hopes for trade talks, but a stronger US dollar and higher Treasury yields capped gains.

Spot gold rose 0.2 per cent to US$3,305.50 per ounce as at 0106 GMT. US gold futures fell 0.1 per cent to US$3,314.50.

On Tuesday, Trump said he would impose a 50 per cent tariff on imported copper and introduce long-threatened levies on semiconductors and pharmaceuticals.

The president sent tariff letters to 14 countries, including Japan and South Korea, on Monday, notifying them of higher tariffs from Aug 1.

The US dollar index steadied after nearing a two-week high on Tuesday, while the yield on benchmark 10-year US Treasury notes hovered near a three-week high.

Higher yield increases the opportunity cost of holding non-yielding bullion, while a weaker dollar makes it more affordable for holders of other currencies.

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Meanwhile, recent national and global surveys of business executives highlighted the Federal Reserve’s dilemma in determining if slowing growth or persistent inflation is the greater risk to the US economy.

Business leaders expect this tension to persist as they plan price increases despite anticipating weaker revenue and demand, surveys of US chief financial officers by the Fed and of global executives by Dun & Bradstreet revealed.

Americans’ inflation outlook remained stable, with the New York Fed’s latest survey showing one-year inflation estimates at 3 per cent, down from 3.2 per cent in May, while the three- and five-year expectations stayed at 3 per cent and 2.6 per cent, respectively.

The minutes of the Fed’s last meeting, due later on the day, will be studied by investors for clues into potential interest rate cuts amid the central bank’s wait-and-see stance.

Spot silver fell 0.4 per cent at US$36.63 per ounce, platinum held steady at US$1,360.38 and palladium lost 0.3 per cent to US$1,107.41. REUTERS