U.S. tariff uncertainty, rate cut bets boost gold 

Gold’s latest round of gains was spurred by heightened uncertainty over Trump’s tariffs, after an appeals court ruled last week that they were illegal. While the court said Trump’s tariffs could remain in place until mid-October, the president criticized the decision and said he would challenge the ruling in the Supreme Court. 

The development sparked increased uncertainty over the economic impact of Trump’s tariffs, a bulk of which took effect in August. Any ruling against the tariffs will also force Washington to negotiate recent deals with major trading partners. 

Persistent bets on a September rate cut also boosted gold, even as data released last week showed inflation remaining sticky. 

Markets were seen pricing in a nearly 85% chance for a 25 basis point cut by the Federal Reserve in September, CME Fedwatch showed.

This came even as personal consumption expenditures price index data for July showed inflation remaining sticky and pulling further above the Fed’s 2% annual target. The central bank views the PCE indicator as a key gauge of price pressures.

Fed Chair Jerome Powell had signaled earlier in August that the Fed was considering a 25-basis point reduction in September, but had still not committed to the move amid concerns over sticky inflation.

Still, the prospect of decreased rates pulled the dollar to a five-week low and supported metal prices. Non-yielding assets such as metals tend to benefit from lower rates, given that they make commodities appear more attractive over investing in government debt.

Among broader metal prices, spot silver rose 0.1% to $40.7545/oz, having earlier rallied past the $40 level for the first time since late-2011. 

Spot platinum rose 0.7% to $1,421.55/oz and was just in sight of a recent 11-year high. 

Silver and platinum have outpaced gold in recent months, as relatively discounted prices per ounce, coupled with some consolidation in gold, sparked a speculative frenzy into both metals.

In industrial metals, copper prices remained upbeat as somewhat underwhelming purchasing managers index data from top importer China drummed up expectations for more stimulus measures from Beijing. 

Benchmark copper futures on the London Metal Exchange rose 0.3% to $9,919.0 a ton, while COMEX copper futures rose 0.4% to $4.5905 a pound.