Gold prices climb to one-week high amid trade tensions
Gold prices jumped sharply on Friday (July 11), recording a one-week high as a wave of concern spread across the global market after US President Donald Trump announced a series of new tariffs, sparking a wave of safe-haven assets.
End of trading session:
Spot gold rose 1.4% to $3,372.60/oz
Gold futures rose 1% to $3,357.19/oz
📉 Market shaken by geopolitical tensions
Mr. Trump's latest move against Canada with a 35% import tax will take effect from next month, while other major trading partners may also face a 15%-20% tax rate.
In particular, this week, Mr. Trump continued to tighten trade policy with a 50% tariff on imported copper metal and a similar tariff applied to products from Brazil.
🛡️ Gold returns to its role as a safe haven asset
According to Aakash Doshi, global head of gold strategy at State Street Global Advisors:
"We are entering a period where uncertainty has returned to global markets. In that context, gold is once again seen as a safe haven for investment flows."
Gold does not generate yield, but it performs very well in the context of market uncertainty and low interest rates, when investors seek safety rather than short-term profits.
🏦 Expectations of Fed rate cuts continue to support gold prices
In addition, on July 10, the Governor of the US Federal Reserve (Fed) - Mr. Christopher Waller said that the Fed could cut interest rates at the upcoming policy meeting at the end of the month.
Currently, the market is betting heavily on the possibility of the Fed cutting interest rates by 0.5% by the end of this year, creating more momentum for gold prices, which are very sensitive to the opportunity cost of holding non-yielding assets such as gold.
📈 Positive outlook for gold in the short term
With a series of supporting factors from trade instability, geopolitical risks to the possibility of Fed policy easing gold is on a solid foundation to maintain its short-term upward momentum.
Investors are closely monitoring the next developments from the White House as well as signals from the Federal Reserve to adjust their investment strategies accordingly.