SINGAPORE: Gold prices held steady on Tuesday as investors weighed safe-haven demand triggered by fresh US tariff threats against the impact of rising Treasury yields, which dampened further gains.
Spot gold inched down 0.1 per cent to $3,330.71 per ounce by 0434 GMT, while US gold futures were flat at $3,340.70.
The market reaction followed US President Donald Trump’s announcement on Monday that new tariffs of 25 per cent would take effect from August 1 on imports from Japan, South Korea, and other trade partners. Trump said the deadline was final, though he might consider extensions if countries presented proposals. Until July 9, “reciprocal tariffs” have been capped at 10 per cent to allow room for negotiations. So far, only the UK and Vietnam have reached agreements.
Despite the news, market sentiment appeared relatively calm.
“Traders seem relatively unfazed by Trump’s tariff letters, and with safe-haven demand largely contained at this point, gold is still just biding its time, waiting for a topside breakout to potentially occur,” said Tim Waterer, Chief Market Analyst at KCM Trade.
Waterer added that rising bond yields and the resilience of Asian markets to the tariff developments are limiting gold’s near-term upside.
Yields on benchmark US 10-year Treasury notes hovered near a two-week high. Higher yields raise the opportunity cost of holding non-yielding assets like gold, pressuring bullion prices.
Meanwhile, China warned Washington against reviving trade tensions, cautioning it may retaliate if the US reinstates tariffs on Chinese goods next month or if countries align with US efforts to exclude China from supply chains.
Trump’s aggressive tariff stance has also stoked inflation concerns, further complicating the Federal Reserve’s decision-making on interest rates. Investors are now eyeing the Fed’s June meeting minutes, due on Wednesday, for more clarity on the central bank’s policy outlook.
Among other precious metals, spot silver edged up 0.1 per cent to $36.77 per ounce. Platinum slipped 0.2 per cent to $1,367.34, while palladium gained 0.2 per cent to $1,113.06.
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