Gold strengthened on Thursday (August 7), supported by renewed safe-haven demand after US President Donald Trump imposed additional 25% tariffs on Indian imports, escalating trade tensions.
Spot gold rose 0.3% to $3,378.18 per ounce at 04:52 GMT. US gold futures rose 0.4% to $3,445.60. "Trump has issued new tariff threats, which keeps gold a top choice as a defensive strategy for investors," said Tim Waterer, chief market analyst at KCM Trade.
"Gold is hovering near the psychological $3,400 level, with risk assets somewhat swayed by the US president's continued tariff announcements." On Wednesday, Trump imposed additional 25% tariffs on Indian imports, citing New Delhi's continued purchases of Russian oil. This deepened the trade rift between the two countries after negotiations stalled.
The new import tax, effective 21 days after August 7, will raise tariffs on some Indian exports to as high as 50%—one of the highest ever imposed on any US trading partner. Trump also said the United States would impose tariffs of around 100% on semiconductor imports, but offered a major exception—these duties would not apply to companies that manufacture in the US or have already committed to doing so.
Adding support to gold, the dollar index hovered near its lowest level in more than a week after surprisingly weak US employment data last week fueled speculation of a US interest rate cut in September. Traders now price in a 95% chance of a 25 basis point rate cut next month, according to the CME Group's FedWatch Tool.
The Federal Reserve may need to cut interest rates soon in response to a slowing US economy, said Minneapolis Fed President Neel Kashkari. Gold, traditionally considered a safe haven asset amid political and economic uncertainty, tends to thrive in low interest rates.
Elsewhere, spot silver rose 0.5% to $38.04 an ounce, platinum fell 0.4% to $1,328.77, and palladium rose 1.3% to $1,146.80.(alg)
Source: Reuters
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