Gold prices set for weekly drop as strong dollar weighs; Trump tariffs in focus

Investing.com-- Gold prices were little changed Friday, but were heading for a third straight weekly loss, as a surging dollar offset safe-haven demand spurred by escalating U.S. trade tensions.

At 06:15 ET (10:15 GMT), Spot gold fell 0.1% to $3,346.00 an ounce, while Gold Futures gained 0.1% to $3,294.20/oz. 

Both benchmarks were heading for a weekly loss of over 1% as the signing of trade agreements by the U.S. with major trading partners Japan and the European Union helped lift risk sentiment, weighing on this safe haven

Dollar strength lifts costs, curbs demand

Additionally, the US Dollar Index climbed to its highest level in more than two months earlier Friday, and was on track for its best weekly gain in nearly three years.

A firmer dollar makes gold more expensive for holders of other currencies and typically dampens buying interest in the bullion. 

The dollar was boosted by the Federal Reserve’s decision to leave interest rates unchanged and renewed policy uncertainty tied to U.S. trade moves. 

Trump escalates tariff action

That said, U.S. President Donald Trump on Thursday signed an executive order, introducing steep “reciprocal tariffs” on imports from more than a dozen countries ahead of an August 1 deadline.

Tariff rates range from 15% on South Korean goods, to 20% on Taiwanese exports, 19% on Thai exports, 25% on Indian exports.

In a separate order, Trump raised tariffs on Canadian goods to 35% from 25%, citing Canada’s insufficient efforts to prevent fentanyl shipments from entering the U.S.

While heightened tariff actions typically boost demand for safe-haven assets, a stronger U.S. dollar capped gold’s upside.

U.S. copper stabilizes after sharp declines

Platinum Futures fell 1.6% to $1,278.60/oz, while Silver Futures dropped 0.6% to $36.493 per ounce.

Benchmark Copper Futures on the London Metal Exchange rose 0.1% to $9,621.25 a ton, while U.S. Copper Futures gained 1% to $4.3985  a pound.

U.S. copper prices plunged 19% on Wednesday after President Trump excluded refined metal from his planned 50% import tariff, and extended these losses on Thursday.

Starting August 1, a 50% tariff will apply to semi-finished copper products and copper-heavy goods, but not to copper ores, concentrates, or cathodes.

Ayushman Ojha contributed to this article