Gold prices steadied at weekly highs on Thursday, lifted by fresh safe-haven demand after United States President Donald Trump escalated trade tensions by imposing an additional 25% tariff on Indian imports.
The move added to expectations of a broader trade dispute and supported demand for bullion amid economic uncertainty.
By 3:45 pm AEST (5:45 am GMT), spot gold had edged up $4.05, or 0.1%, to $3,373.21 per ounce, holding firm after a modest climb during the Asian trading session.
Trump’s latest trade action, announced Wednesday, targets Indian goods in response to New Delhi’s continued imports of Russian oil.
The new tariffs, due to take effect 21 days after 7 August, could raise duties on some Indian exports to as high as 50%, marking one of the steepest tariffs imposed on any U.S. trading partner.
In addition, Trump said the U.S. would levy a 100% tariff on semiconductor imports, with exceptions for companies manufacturing domestically or those that have committed to doing so.
The announcement sparked renewed caution in global markets and lent support to gold, a traditional safe-haven asset during periods of political and economic turbulence.
The metal also drew strength from growing market expectations that the Federal Reserve will resume rate cuts as early as September. Soft U.S. employment data released last week pushed the dollar index to a more than one-week low and reinforced bets for monetary easing.
According to the CME Group FedWatch Tool, traders are pricing in a 94.9% chance of a 25-basis-point rate cut next month.
Minneapolis Fed President Neel Kashkari added to dovish sentiment, suggesting the Fed may need to act soon to support a slowing economy.
Lower interest rates tend to benefit gold, which does not yield interest and becomes more attractive when returns on other assets decline.
Despite the support, gold’s upside was capped by a generally optimistic tone in equity markets, which has so far prevented a decisive break above the $3,400 threshold.
