WASHINGTON (dpa-AFX) - Gold jumped on Monday as concerns about the impact of high tariffs imposed by the US on its major trading partners intensify.
Front Month Comex Gold for August delivery advanced by $26.70 (or 0.80%) to $3,374.40 per troy ounce.
Front Month Comex Silver for August delivery gained by 40.50 cents (or 1.10%) to $37.192 per troy ounce today.
With the suspension period for 'reciprocal tariffs' set by the US President Donald Trump ending last Friday, many major trading partners were hit with high tariffs - a whopping 35% for many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan, and 39% for Switzerland.
All these nations are engaged in discussions with the US to trim Trump's high levies and strike a fair trade deal as soon as possible.
As these duties are set to take effect only from August 7, the global economy is yet to feel the heat of its impact but have re-ignited global trade war tensions and concerns of an economic slowdown in the near term.
Traders hope that like China and the EU arrived at trade deal frameworks with the US, other countries will find a way for smooth bilateral trade. It is widely believed that being a dealmaker, Trump shall keep the doors open for discussions.
Last week, data released by the Labor Department revealed that the US economy added 73,000 jobs in July and the unemployment rate crept up to 4.2%. Hiring estimates for May were also downwardly revised from 144,000 to just 19,000, and June's figure was cut from 147,000 to 14,000.
As these numbers unexpectedly revealed a weakening US job market, expectations of a rate cut by the US Federal Reserve in September and another in December have increased.
Friday's soft jobs data helped gold to move up into positive territory. Analysts feel that with signs of inflation showing up, the market situation is currently bullish for gold.
Today's data for new orders for US manufactured goods revealed that factory orders tumbled 4.8% in June following a revised 8.3% surge in May, aligning closely with market expectations for a 4.9% decline.
In a significant move, Trump has ordered the dismissal of Commissioner of Labor Statistics Erika McEntarfer, accusing the department of rigging job data numbers which paints a poor picture of the US economy. Earlier, Federal Reserve Governor Adriana Kugler announced her resignation.
On Friday, Trump announced that he had ordered two nuclear submarines to be positioned in the 'appropriate regions' to counter Russian provocation about a war with the US. And on Sunday, he told reporters that the submarines are 'in the region where they have to be'.
As the deadline given to Russia by Trump to reach a ceasefire with Ukraine ends on August 8, a US special envoy is scheduled to visit Russia in the next couple of days to avert a geopolitical crisis.
Often seen as a safe-haven asset during economic or geopolitical stress, gold usually benefits from a weaker dollar and expectations of lower interest rates. Hence, traders feel that in the near short-term, gold prices may remain bullish.
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