Gold Holds Steady Amid Trump’s Tariff Threats and Trade Turbulence

Gold remained stable around $3,370 an ounce despite President Trump’s tariff threats on chip imports and rising trade tensions. The metal’s nearly 30% annual gain is driven by rate cut expectations, central bank buying, and dollar diversification. Traders now await Trump’s Fed nominee, who is expected to favor looser monetary policy.

Gold prices remained stable despite growing global trade tensions sparked by U.S. President Donald Trump's recent threats to impose a 100% tariff on semiconductor imports. Bullion hovered near $3,370 an ounce, marking only a slight change after a modest 0.3% decline in the previous session.

Traders largely brushed off the uncertainty, focusing instead on broader market expectations of interest rate cuts and continued demand for safe-haven assets. Trump’s aggressive trade stance—meant to push chipmakers to relocate production to the U.S.—has added to geopolitical jitters. At the same time, tensions escalated with key trade partners, including India and Japan. The U.S. recently doubled tariffs on Indian goods to 50% in response to its ongoing energy purchases from Russia, while Japan also faces possible increased duties.

Adding to investor watchlists is Trump’s upcoming nomination of a temporary Federal Reserve governor, expected to be aligned with his preference for looser monetary policy. A dovish Fed would likely support gold prices further, as lower interest rates make non-yielding assets like gold more attractive.

Despite the recent stability, gold has surged nearly 30% this year, driven by central bank purchases, diversification away from the U.S. dollar, and market uncertainty. Most of these gains occurred in the early months of 2025, amid heightened geopolitical friction and shifting economic policies.

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As of early trading in Singapore, gold was up 0.1% at $3,373.45 an ounce. Other precious metals, including silver, palladium, and platinum, also saw gains. Meanwhile, the Bloomberg Dollar Spot Index remained flat, highlighting the market’s cautious approach amid unresolved global tensions and monetary policy shifts.