Gold held steady on Tuesday after US President Donald Trump unveiled higher tariffs on imports from Japan, South Korea, and other nations, while a firm dollar and higher Treasury yields limited potential gains.
Spot gold was steady at $3,334 per ounce, as of 0220 GMT. US gold futures remain unchanged at $3,344.20.
On Monday, Trump began telling trade partners that sharply higher US tariffs would start on August 1, marking a new phase in the trade war he launched earlier this year, with tariffs on goods from Japan and South Korea set at 25 percent.
Trump said the August 1 deadline for implementing the tariffs was firm but that he would consider extensions if countries made proposals.
“Reciprocal tariffs” were capped at 10 percent until July 9 to allow for negotiations, but only agreements with Britain and Vietnam have been reached so far.
“Trump’s latest tariff letters are keeping gold in the frame for investors as an uncertainty hedge, but a resilient US dollar and higher bond yields are constraining the metal’s immediate upside potential,” KCM Trade Chief Market Analyst Tim Waterer said.
The yield on benchmark US 10-year notes hovered near a two-week high, while the US dollar index steadied after reaching a one-week high in the prior session.
Higher yields increase the opportunity cost of holding non-yielding bullion, while a stronger dollar raises gold’s cost for holders of other currencies.
