Dollar Down, Gold Price Up on Eve of Trump's 'Unreasonable' Trade Tariffs
Wednesday, 8/06/2025 17:03
The GOLD PRICE rose against a weaker Dollar on Wednesday, slipping from yesterday's multi-week highs for non-US investors as global stock markets rallied ahead of US President Trump's latest wave of trade tariffs coming into force, with further sanctions being discussed to end Russia's war on Ukraine.
While
gold and silver bullion are exempt from Trump's tariffs, US imports of other goods from global refining giant Switzerland now face a "crippling" 39% charge thanks to Washington mistakenly included precious
metals flows in their math according to Bloomberg analysis.
Tomorrow's trans-shipment tariffs − charging an additional 40% on goods believed to have originally come from world No.1 gold consumer China − "could prove economically devastating for countries like Vietnam, Indonesia, Cambodia, and Malaysia," says Puan Yatim, associate professor at Malaysia's Graduate School of Business.
Trump today imposed an additional 25% tariff on goods from world No.2 gold consumer India because it continues buying oil from Russia, a move called "unfair, unjustified and unreasonable" by the BJP-led coalition Government in New Delhi.
"Tariffs at the current levels are a much bigger impact than the next 50 basis point move by the Fed," says US investment strategist and author Lyn Alden, "
yet the latter gets as much if not more attention."
Like gold, the price of silver rallied Wednesday in US Dollar terms, peaking with 5 cents of $38 per Troy ounce − a new 14-year high when crossed this time last month − while the S&P500 index of US stocks reversed the last of Friday's sudden 1.6% plunge after
Trump fired a senior statistician and called for Fed chief Jay Powell a "moron" for not cutting interest rates.
With the MSCI World Index of Western-economy stock markets as a group rising for only the 2nd time in 8 sessions, the Dollar price of gold today rose within $10 of Tuesday's 2-week peak at $3390 per Troy ounce.
But the Dollar's decline to 7-session lows on its DXY index saw gold prices decline against non-US currencies, falling through €2900 after hitting a 6-week high yesterday at €2931 for German, French, Italian and Spanish investors.
The
UK gold price in Pounds per ounce meanwhile fell £25 from Tuesday's 3-month high of £2550, even as the Labour Government's borrowing costs rose on the bond market amid press headlines over needing to fill a £50 billion 'black hole' in the public finances according to one London think tank.
"There's no question that India is a major transshipment and processing hub for Russian oil," says Robin Brooks, senior fellow at The Brookings Institution think tank and a former FX strategist at US investment bank Goldman Sachs.
"But hitting India with secondary tariffs is something Putin loves. Better to hit Russia directly by sanctioning the shadow fleet" of ageing tankers whose ownership is hidden and which avoid using services from Western companies.
With Russia making solid advances into Dnipropetrovsk and eastern Donetsk while launching a record number of drone attacks on Ukraine this month, Trump's envoy Steve Witkoff today held "useful" talks with Russia's President Putin in Moscow.
Trump himself had "productive" talks by phone with Ukraine's President Zelenskyy on Tuesday.
As Japan's Hiroshima marked 80 years to the day since the USA dropped the 'Little Boy' atomic bomb on the city, UK intelligence said Russian forces have now suffered over 1 million wounded or killed in Putin's invasion of Ukraine.
The latest
US poll by YouGov for The Economist magazine meantime claimed that over 2-in-5 Americans now believe Israel is committing genocide against Palestinian civilians.
Twenty-eight per cent of the 1,700 adults polled said 'No', while the same proportion said they 'Don't know'.
Occupying Gaza is
"pointless" and a "very bad idea" said Israeli opposition leader Yair Lapid to Benjamin Netanyahu today, saying that the Prime Minister's plan to take over the strip is an operation "you don't embark on unless the majority of the country is behind you."
But "the die is cast," The Times of Israel quotes an un-named official also calling for head of the IDF Lt. Gen. Eyal Zamir to resign if he opposes Netanyahu's plan as is widely reported.
Prior to Hamas' 7th October atrocities across southern Israel in 2023, the price of
gold had traded dead-flat for that year-to-date at $1810.
Since then, the price of gold has risen more than 85% in Dollar terms.
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