Gold Falls as Dollar Strengthens, Tariff Threats Weigh on Metals

Gold prices dropped in Asian trading on Monday, pressured by a strong U.S. dollar and fading hopes of near-term interest rate cuts. Spot gold fell 0.7% to $3,312.12 an ounce, while September gold futures slipped 0.8% to $3,320.67. The dollar held firm after last week’s upbeat U.S. payrolls data, which reduced expectations of a Federal Reserve rate cut in July or September.

Market sentiment was further dampened by renewed tariff threats from U.S. President Donald Trump. On Sunday, Trump warned of an additional 10% levy on nations aligned with BRICS, accusing the bloc of anti-American policies. However, the move did little to boost safe haven demand for gold, as Trump also delayed the implementation of new tariffs from July 9 to August 1, giving countries more time for trade negotiations.

Since April, the U.S. has secured only a few trade deals—most notably with the UK, China, and Vietnam—despite Trump’s claim of targeting 90 agreements in 90 days. Meanwhile, the CME FedWatch tool indicated a sharp decline in market bets on upcoming rate cuts, following robust labor market data. Higher interest rates typically support the dollar while weighing on commodities priced in the greenback.

The impact extended across other metals. Platinum futures dropped nearly 2% to $1,381.00 an ounce after a strong June rally. Silver futures declined 0.6% to $36.91. Industrial metals were also under pressure, with London copper futures falling 0.6% to $9,807.10 per ton and U.S. copper futures down 1% to $5.0130 per pound.

Investors remain cautious amid global trade uncertainty and shifting monetary policy expectations, keeping metal prices under pressure heading into the second half of 2025.