- Early Asian trading on Tuesday sees gold prices around $3,350.
- Trump has proposed 100% secondary tariffs on Russia.
- The US CPI inflation report for June is expected later today.
In the early sessions on Tuesday, gold (XAU/USD) is set around $3,350. There’s increased interest in precious metals, driven by a push for safe investments following President Donald Trump’s threat of 100% tariffs on Russia. Investors are particularly attentive to the inflation data from the US Consumer Price Index (CPI) scheduled to be released later today.
Trump indicated late Monday that he would enforce these tariffs if President Vladimir Putin doesn’t agree to negotiations to halt the Ukrainian invasion within 50 days. He didn’t elaborate much, but mentioned that these tariffs would be implemented as secondary tariffs. Given this situation, geopolitical uncertainties may temporarily boost gold prices, which are generally viewed as secure assets.
That said, there are concerns that the US Federal Reserve’s cautious approach might dampen gold’s appeal. Jerome Powell, the Fed Chairman, mentioned he anticipates inflation to rise this summer due to these tariffs.
Additionally, Chicago Federal Reserve President Austan Goolsbee expressed that the new tariffs have further complicated the inflation outlook, making it challenging for the President to advocate for potential interest rate cuts.
Gold traders are on the lookout for the US CPI data coming later. It could indicate future US interest rate trends. Economists predict a slight increase in inflation from last month, but if the inflation signs are softer than expected, it could lead to optimistic forecasts regarding Fed rate cuts, which might help elevate gold prices.
