Gold prices opened the week lower, weighed down by renewed demand for the United States dollar as investors braced for the economic impact of President Donald Trump’s incoming tariff announcements.
By 3:40 pm AEST (5:40 am GMT), spot gold fell by $24.64, or 0.7%, to US$3,312.25 per ounce, pulling back from last week’s peak of $3,336.6.
The retreat follows a 1.9% weekly gain but reflects fresh caution in global markets as trade tensions rise.
Markets remain on edge as Trump’s trade deal negotiations continue. During Monday's U.S. session, letters are expected to be sent to 12 countries that have yet to finalise trade agreements with the United States. These letters will outline country-specific tariff rates set to take effect on 1 August.
Trump warned the new rates could reach as high as 70%, up from the 10% base tariff rate introduced in April.
Adding to the anxiety, Trump also stated that an additional 10% tariff would apply to countries "aligning themselves with the anti-American policies of BRICS".
Gold, a non-yielding asset, also came under pressure from stronger-than-expected U.S. jobs data last week, which dampened expectations for near-term interest rate cuts by the Federal Reserve.
June’s nonfarm payrolls rose by 147,000, beating consensus estimates of 110,000. The unemployment rate also surprised to the downside, falling to 4.1% from 4.2%, against expectations of a rise to 4.3%.
Market participants will be closely watching the release of the Federal Reserve’s June meeting minutes on Wednesday for further insight into the central bank’s outlook on interest rates.
