Gold rises amid Trump trade threats and Fed suspense
Gold advanced sharply as market uncertainty grew. President Trump’s recent tariff threats have reignited fears of a prolonged trade war. Spot gold climbed 2.3% to $3,316.04 an ounce in New York trading, underscoring gold’s role as a safe haven during geopolitical stress.
Investors are also watching the Federal Reserve closely. Its decision on interest rates is due this week. Gold markets are bracing for a potential shift.
Gold surges in response to Trump policies
So far this year, gold has surged 26%, briefly topping $3,500 an ounce in April. Trump’s unpredictable geopolitical moves have boosted gold demand worldwide. His latest comments suggest trade deals with some countries may happen soon—but not with China.
The lack of progress with Beijing continues to fuel safe-haven demand for gold. As long as the trade war lingers, gold is likely to benefit.
Fed expected to hold as Trump applies pressure
Despite Trump’s push for lower rates, the Federal Reserve is widely expected to hold steady. Last week’s strong job numbers gave Fed Chair Jerome Powell little reason to cut. A robust labor market often supports holding interest rates.
However, Trump criticized the Fed for not cutting sooner. His continued pressure on Powell has created tension between monetary policy and political influence. This dynamic keeps gold investors on alert.
Gold remains a hedge against economic volatility
Gold’s appeal lies in its role as a hedge. Trump’s policies—marked by tariffs, sanctions, and bold diplomacy—have triggered demand for stability. Gold offers that. Central banks, including China’s, have ramped up their gold buying amid uncertainty.
Speculative buying in China has also added to gold’s rally. Investors across the globe are moving assets into gold, anticipating future market shocks.
Precious metals mixed as gold shines
Silver followed gold’s lead, posting gains in New York. Platinum and palladium, however, declined. The Bloomberg Dollar Spot Index fell 0.4%, giving gold further support. A weaker dollar often boosts gold prices by making the metal cheaper for foreign investors.
On the Comex, copper rose 0.4% to $4.691 a pound. Meanwhile, base metal activity was muted due to a UK holiday, with the London Metal Exchange closed.
What’s next for gold investors?
Looking ahead, gold could remain volatile. Much depends on future Fed signals and how Trump handles trade negotiations. If tensions with China continue to escalate, gold could climb further.
Investors will also monitor inflation data and global economic indicators. With markets on edge, gold will likely stay in focus.