Gold (XAU/USD) prices continue to chop on Thursday as markets digest fresh tariff threats from President Donald Trump and renewed expectations for a Federal Reserve interest rate cut.
Spot gold was trading at $3,381.50 an ounce by 09:15 GMT, stuck in the same range since Monday despite rising geopolitical and macroeconomic tension.
Investor appetite for gold strengthened after Trump announced a plan to impose a 100% tariff on imported semiconductors from certain countries unless they commit to investing in US chip manufacturing. While framed as a domestic production boost, the policy raised alarm over renewed disruptions to global supply chains and the potential for higher inflation.
Trump also signed an order doubling tariffs on Indian imports to 50%, citing its purchases of Russian oil. In a post on Truth Social late Wednesday, he confirmed that reciprocal tariffs would take effect at midnight, keeping markets cautious.
These trade escalations added to gold’s appeal as a traditional hedge against inflation and volatility.
Bullion also found support in the growing belief that the Federal Reserve may begin cutting interest rates as early as September.
This week’s economic data showed a further slowdown in the US services sector, adding to last week’s disappointing jobs report and raising recession concerns.
According to the CME FedWatch Tool, markets are now pricing in a 95% chance of a September rate cut.
Fed officials have hinted at a possible cut, though persistent inflation risks tied to tariffs could complicate the path forward.