Two Factors To Consider Before Entering The Gold Market
FOMC minutes
The Federal Reserve was split between holding the interest rate and cutting the rate, given how the tariffs’ impact might be “one-time” rather than persistent and sticky. This suggests an easing in the tariff fear in June and July. This indicates a positive sentiment that the Federal Reserve did not rule out a rate cut, which could boost the gold price to some extent.
Yet, as of now, the CME fedwatch tool has already thrown the July rate cut off the table with odds of 93.3% on holding while pricing in two rate cuts. So as long as Trump won’t escalate the tariff policies, these odds might be likely to come true, albeit we all know what will happen next.
President Donald Trump’s trade policy
On the flip side, President Donald Trump also imposed more tariffs on other major trading partners while claiming the possibility of having more escalating tariffs coming soon, later today—a.k.a. sending out more tariff letters. Other than that, Trump also repeated the urging to lower the interest rate as soon as possible.
Below are the countries that he imposed last night, with an effective date of August 01, 2025. That also applies to copper. In response, as part of the major exporter of copper, Mexico’s president, Sheinbaum, will discuss further in DC on Friday.
So ever since Trump tried to invade the global trade agreement, gold has been on an upside trend as the uncertainty has led to an increase in safe-haven demand, such as gold. Therefore, an upward movement in gold last night was the result of Trump’s trade policies and his commitment to lowering the interest rate, while some factor from the FOMC also played a role.
