Gold Wavers As Trump's Deal With Japan Eases Trade Concerns
Gold has climbed about 30% this year, as uncertainty around Trump’s aggressive attempts to reshape global trade and conflicts in Ukraine and the Middle East sparked a flight to safety.
Gold dipped after a three-day rally as US President Donald Trump’s deal with Japan allayed trade war concerns that have stoked demand for haven assets.
Bullion retreated as much as 0.4% to less than $3,420 an ounce after Trump said he would impose 15% levies on goods from Japan. The terms were better than most investors expected, following fraught negotiations.
With several countries still racing to secure agreements ahead of an Aug. 1 deadline, investors continue to seek clarity on progress with China in particular. US Treasury Secretary Scott Bessent said he’ll discuss a potential extension of the trade truce with the Asian powerhouse during talks in Stockholm next week.
Gold has climbed about 30% this year, as uncertainty around Trump’s aggressive attempts to reshape global trade and conflicts in Ukraine and the Middle East sparked a flight to safety. The precious metal has consolidated within a tight range over the past few months, though this week’s gains of nearly 2.5% have pushed prices roughly $80 short of April’s record high above $3,500 an ounce.
Traders were also monitoring the future of the Federal Reserve. Bessent offered support for Fed Chair Jerome Powell, who has found himself in the line of Trump’s fire for holding interest rates steady while waiting to see if tariffs impact inflation. Monetary policy loosening tends to benefit the precious metal, which doesn’t pay interest.
Spot gold traded little changed at $3,427.00 an ounce as of 1:18 p.m. in London. The Bloomberg Dollar Spot Index was flat, after edging 0.4% lower in the previous session. Platinum was also little changed, while palladium fell.
Silver, meanwhile, rose 0.3% to $39.41 an ounce, the highest since 2011. The white metal has advanced 36% this year, with gains recently outpacing gold.
Unlike gold, silver is mostly used as an industrial input. That source of demand has grown in recent years, particularly for its application in solar cells. Solar photovoltaics accounted for nearly 200 million ounces of demand in 2024, quaduple the level of a decade before, according to figures from the Silver Institute. Against that backdrop, the market is headed for a fifth year in deficit, according to the indusry group.
There has also been evidence of tightness in the London market, the dominant trading venue for spot silver, after nearly half a million ounces flooded into US warehouses on tariff fears. The cost of borrowing the metal has jumped above historical norms, while growing exchange-traded fund holdings further erode the amount of metal freely available to buy.
The higher-than-expected 50% US tariff on copper also jolted the silver market, leading to US premiums for the white metal jumping to 80 cents an ounce, before paring back. Silver has been exempted from tariffs, but the high tax on another industrial metal highlighted the tail risk of futures levies.
US front-month copper futures are now trading at a record premium over LME prices, with gap reaching about $2,900 a ton on Wednesday. That’s nearly 30% above the price in London. The metal was flat on the LME at $9,925.00 a ton. Aluminum edged lower, while zinc and nickel traded sideways.
