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Investing.com-- Gold prices fell in Asian trade on Monday, pressured by a steady dollar amid more tariff threats from U.S. President Donald Trump, while strong payrolls data from last week also dented bets that interest rates will fall soon.
Trump’s tariff threats spurred little safe haven demand, given that the president also postponed his effective trade tariff deadline to August 1 from July 9.
The U.S. president threatened higher tariffs against the BRICS bloc of countries, and said he will begin issuing letters with his planned tariffs to major countries starting from Monday.
Spot gold fell 0.7% to $3,312.12 an ounce, while gold futures for September fell 0.8% to $3,320.67/oz by 00:10 ET (04:10 GMT).
Trump threatens additional BRICS tariff, extends July 9 deadline
Trump on Sunday signaled that his tariff increases will now take effect from August 1 instead of July 9, likely giving countries more time to hash out U.S. trade deals.
The president said he will begin sending out letters to major economies with his tariff levels from Monday, although it remained unclear just what these levels will entail. Trump had in April outlined tariffs between 10% to as high as 50% on major economies.
The president on Sunday also threatened an additional 10% levy on countries aligned with the BRICS bloc, which he claimed was anti-American.
But Trump’s threats did little to drive up safe haven demand for gold, given that his deadline extension delays the impact of his trade tariffs.
Still, Washington has signed few trade deals-- specifically with the UK, China, and Vietnam-- since April, largely missing Trump’s claims of at least 90 trade deals in 90 days.
Dollar steady as rate cut bets wane, metal prices pressured
Gold and broader metal prices were also pressured by a relatively strong dollar, which retained most of last week’s gains following stronger-than-expected U.S. nonfarm payrolls data.
Platinum futures fell nearly 2% to $1,381.0/oz after a stellar rally in June. Silver futures fell 0.6% to $36.910/oz.
Trump’s tariff warning on Sunday also drove some flows into the greenback.
But the dollar’s biggest point of support was a sharp scaling back in expectations that the Federal Reserve will cut interest rates at its next two meetings.
This was spurred chiefly by Thursday’s strong payrolls reading, which showed the labor market remained resilient despite other economic headwinds. Traders were seen largely wiping out bets for a July rate cut by the Fed, and were also seen increasing bets that the Fed will hold in September, CME Fedwatch showed.
Higher rates stand to benefit the dollar and pressure metal prices, which are largely pegged against the greenback.
Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.6% to $9,807.10 a ton, while U.S. copper futures fell 1% to $5.0130 a pound.