Gold Slips, U.S. Copper Prices Soar on Trump’s 50% Tariff Threat

Gold prices dipped in Asian trade on Wednesday as safe-haven demand failed to materialize despite rising geopolitical tensions. Instead, investors turned to the U.S. dollar, which is rebounding from three-year lows, following President Donald Trump's announcement of steep new tariffs and stronger-than-expected labor market data.

At 04:55 GMT:

• Spot gold fell 0.2% to $3,294.88/oz

• Gold futures (September) slipped 0.4% to $3,303.20/oz

Dollar Strength Undermines Gold

Despite the volatility surrounding Trump's latest tariff salvo, gold failed to attract its typical safe-haven flows. Traders appear to be positioning themselves for a stronger dollar, with reduced expectations of a Federal Reserve rate cut following upbeat U.S. jobs data.

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The Federal Reserve has warned that elevated tariffs—such as the ones proposed by Trump—could add upward pressure on inflation, potentially limiting the central bank's flexibility to cut rates.

Other Metals Weaken, Copper Defies Trend

Other precious and industrial metals were largely in retreat:

• Platinum futures fell 1.1% to $1,376.35/oz

• Silver futures were slightly higher at $36.838/oz

However, U.S. copper futures were the standout:

• Copper surged 2.6% to $5.6457/pound, after hitting an all-time high of $5.8955/pound on Tuesday

The gains follow Trump's proposal of a 50% tariff on imported copper, aimed at reducing U.S. dependency on foreign supply and bolstering domestic production. The move is widely expected to benefit domestic miners, notably Freeport-McMoRan Inc. (NYSE:FCX).

Meanwhile, London Metal Exchange (LME) copper futures fell 1.6% to $9,644.45/ton, hit by fears of declining U.S. import demand and mixed inflation data from China, the world's top consumer of copper.

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Outlook

Gold's inability to rally during heightened trade uncertainty reflects a changing macro environment, where currency and yield dynamics dominate sentiment. For copper, the focus is now squarely on supply chain restructuring, making U.S.-based producers a potential bright spot in the current volatility.

If Trump follows through with the copper tariffs, expect continued divergence between U.S. and global metal prices—a trend investors may need to watch closely heading into Q3.