Gold Price Movement: Trump’s Tariff Development
Gold price continues to build up given President Trump’s pressure on the trade card, with a potential of having reciprocal tariffs back from his major trading partner.
Yesterday, Trump imposed 50% tariffs on copper that are set to take effect on August 01, 2025, while others responded:
- China Foreign Ministry: “We oppose politicizing economic and trade issues,” suggesting that China views the tariff as an unjustified use of political motives to interfere with economic and trade relations, raising concerns over further escalation.
50% tariff on Brazil, particularly concerning the flow of Brazilian coffee to the US, while Industrial products such as aircraft, cellulose, and machinery also made up 78.3% of exports
- Brazil’s Lula on US tariffs: “The main thing is the reciprocity law; if he charges us 50%, we will charge him 50%.” This also means that if the negotiation does not work, then we will likely see more tension.
Higher tariffs → higher export price and higher product price → raising up inflation → the road to achieving the 2% sustainable price would be very, very difficult.
Approximately 2 hours ago, 35% tariffs were placed on goods from Canada, while planning to impose blanket tariffs of 15% or 20% on most other trading partners. Trump also stated that the degree of the new tariff rate will be set depending on the relationship between them. Yet, Canada has not responded.
So what are all of these telling you?
Trade tensions still exist, regardless, and the market is still reacting to them. However, do consider the ceasefire between Israel and Gaza, the delay rate cut projection, or the agreement on trade between countries.
Higher tension in trade, lower interest rates, debt problems, or re-acceleration in war conflict → uncertainty exists → the gold price is likely to go up. And vice versa.
