Trump’s Tariff Announcements Spark Gold Price Surge
Trump’s Tariff Announcements Spark Gold Price Surge: What’s Next for XAU/USD?
Introduction
Gold (XAU/USD) has always been a go-to safe-haven asset during times of economic uncertainty, and recent developments have once again thrust it into the spotlight. On July 11, 2025, U.S. President Donald Trump announced a new wave of tariffs, including a 35% tariff on Canadian goods and a 50% tariff on copper imports, set to take effect on August 1. These bold moves have reignited global trade war fears, sending investors flocking to gold and driving prices to a two-week high. In this blog post, we’ll dive into the details of Trump’s tariff policies, their impact on gold prices, and what traders and investors should watch for moving forward.
Trump’s Tariff Blitz: A Game-Changer for Global Markets
President Trump’s aggressive tariff strategy has escalated tensions in global trade. The latest announcements include:
- 35% Tariff on Canada: Announced on July 11, 2025, this tariff targets one of the U.S.’s largest trading partners, catching markets off guard after signs of improving trade relations.
- 50% Tariff on Copper Imports: Declared earlier in the week, this tariff affects a critical industrial metal used in everything from power grids to military applications.
- 50% Tariff on Brazilian Imports: Effective August 1, this includes copper and energy-linked commodities, further intensifying trade war concerns.
- 25% Tariffs on Japan and South Korea: These tariffs, also set for August 1, have added to global economic uncertainty, impacting risk-driven assets.
- 15%-20% Blanket Tariffs on Most Trading Partners: Trump’s broader tariff threats have markets bracing for a potential overhaul of global supply chains.
These measures follow Trump’s campaign promises to bolster the U.S. economy and protect American producers. In 2024, Mexico, China, and Canada accounted for 42% of U.S. imports, with Mexico alone exporting $466.6 billion worth of goods. The new tariffs signal a continuation of Trump’s protectionist agenda, which has already disrupted global equities and fueled volatility.
Gold’s Reaction: A Safe-Haven Rally
Gold prices (XAU/USD) have responded swiftly to the tariff announcements, climbing 1% to a one-week high on July 11, 2025, and reaching a two-week peak by July 12. Here’s why gold is shining:
- Safe-Haven Demand: The tariffs have sparked fears of a renewed global trade war, prompting investors to seek refuge in gold. The uncertainty surrounding trade negotiations and potential retaliatory measures from countries like Brazil and Canada has amplified this trend.
- Dollar Weakness: A slight pullback in the U.S. dollar has made gold more attractive to investors holding foreign currencies, as dollar-priced bullion becomes cheaper.
- Inflation Fears: Trump’s tariffs, particularly the 50% levy on copper, are stoking concerns about rising inflation. Higher commodity prices could ripple through global supply chains, increasing costs and reinforcing gold’s appeal as an inflation hedge.
As of July 11, spot gold was trading at $3,331.89 per ounce, with U.S. gold futures slightly higher. Despite a strong dollar capping gains in some sessions, XAU/USD has gained 26% in 2025, driven by safe-haven bets and recession risks tied to Trump’s policies.
Broader Implications: What’s Driving the Market?
Beyond tariffs, several factors are shaping gold’s trajectory:
- Federal Reserve Policy: The Fed is under scrutiny as Trump’s tariffs complicate its path to rate cuts. Minutes from the June 17-18 meeting indicate that most policymakers expect rate reductions later in 2025, but inflationary pressures from tariffs could delay this timeline. Trump’s reported pressure on the Fed, including rumors of replacing Chair Jerome Powell, adds another layer of uncertainty.
- Global Economic Fallout: The tariffs have already dented major stock indexes, with risk-off sentiment boosting safe-haven assets like gold and the Japanese yen.
- Geopolitical Tensions: Ongoing conflicts in the Middle East are providing additional support for gold, as investors hedge against global instability.
Experts, including those cited on X, recommend buying gold amid heightened uncertainty, with some pointing to its role as a hedge against both inflation and economic downturns.
What to Watch Next
Traders and investors should keep an eye on the following:
- Trade Negotiations: Trump has signaled openness to trade deals, but the August 1 deadline looms large. Progress with countries like China, the UK, or Vietnam could temper gold’s rally, while further escalations could drive prices higher.
- Federal Reserve Updates: Any clarity on rate cuts or inflationary pressures will be critical. The Fed’s next moves could either cap gold’s gains or fuel a breakout.
- Technical Levels: A sustained move above 3,400+, while a drop below 3,282.
- Market Sentiment on X: Social media chatter suggests traders are bracing for volatility. Monitoring platforms like X can provide real-time insights into market reactions.
Our Own Analysis
This might be the first time I talk about our take on the market. I personally have been using a AI software that can accurately predict the market. The software has been available for around 20 years. We will talk about this some other times, now let’s get to the real works.
According to our analysis, the price is quite high at this moment. So if you ask me if this is the right time to buy gold for long term investment as safe heaven, I would personally wait until when the price is low, or if there are any movement that meets my requirement, only then I would buy gold.
And for day trading, I would only LONG XAU/USD, see below photo.
Conclusion
President Trump’s recent tariff announcements have injected fresh uncertainty into global markets, propelling gold prices higher as investors seek safety. With trade war fears intensifying, gold remains a critical asset to watch. While short-term volatility is likely, the combination of a weaker dollar, inflation concerns, and geopolitical risks could keep the bullish case for gold alive.
For now, investors should stay nimble, monitor trade developments. As Trump’s policies continue to reshape the economic landscape, gold’s role as a safe-haven asset is more relevant than ever.
Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
Sources: Reuters, FXEmpire, Bloomberg, The Economic Times, CNBC, Mining.com, FXStreet, TradingView, Yahoo Finance, Investing.com, StockTwits, LiveMint, VT Markets, and posts on X.