Latest News

Gold prices rise as Trump doubles India's tariffs and boosts safe-haven demand

Gold prices rose on Thursday as a result of renewed demand for safe-haven assets after U.S. president Donald Trump slapped a 25% additional tariff on Indian imports. This exacerbated trade tensions.

As of 0247 GMT, spot gold was up 0.4% to $3,380.76 an ounce. U.S. Gold Futures rose 0.3% to $3443.30.

Tim Waterer is the chief market analyst for KCM Trade. He said that Trump has issued new tariff threats, which keeps gold on the radar as a defensive move by investors.

The constant tariff announcements by the U.S. President have thrown risk assets off balance. President."

Trump slapped a 25% additional tariff on Indian imports on Wednesday, citing New Delhi’s continued purchase of Russian oil. This deepened a trade rift after negotiations reached a deadlock.

The new import tax will take effect 21 days after the 7th of August and raise duties on certain Indian exports up to 50%. This is among the highest rates imposed on any U.S. trade partner.

The dollar index, which is a measure of the strength of the dollar, hovered around a low for more than a week after surprisingly poor U.S. job data last Friday triggered bets on rate cuts by the U.S. in September. The dollar's weakness makes gold cheaper for holders of currencies other than the US dollar.

According to CME Group's FedWatch Tool, traders are now pricing a 94% probability of a rate cut of 25 basis points next month.

Neel Kazhkari, president of the Minneapolis Fed, said that the Federal Reserve could be forced to lower rates to counter a slowing U.S. economic, even if it is unclear whether tariffs would continue to drive inflation higher.

In an environment of low interest rates, gold, which is traditionally considered to be a safe haven during times of political and economic uncertainty, tends thrive.

The price of palladium fell 0.8%, while platinum dropped 0.7%, to $1324.26. (Reporting and editing by Sumana Nandy, Sonia Cheema and Brijesh Pate in Bengaluru)

(source: Reuters)