Gold nears breakout as Trump tariffs shake markets, says Emkay; sees uptrend ahead
Gold futures for August delivery on MCX were trading 0.31 percent higher at ₹ 98,117 per 10 grams early Monday, reflecting rising investor nervousness after Trump threatened to impose a 30 percent tariff on imports from Mexico and the European Union beginning August 1. The move has raised concerns over renewed trade tensions, leading to increased volatility in global markets and prompting investors to seek refuge in gold.
Trump has targeted over 22 countries with new tariff announcements, justifying the move with claims of trade imbalances and 'common sense' economics. In response, the European Union has opted to extend its suspension of countermeasures against the US until August 1, 2025, hoping to reach a diplomatic resolution.
According to Emkay Wealth Management's latest Navigator report, gold is currently in a consolidation phase internationally—a pattern that typically precedes a strong upward movement. The wealth management firm noted that earlier in 2025, robust demand from China had helped support gold prices. However, with Chinese selling between April and May, this factor has faded in influence. In contrast, the recent strengthening of the US dollar and rising US bond yields have exerted short-term downward pressure on gold.
Emkay highlighted two key triggers for a potential upside in gold. The first is the trajectory of US interest rates. With the Federal Reserve still undecided on rate changes due to uncertain inflation dynamics, one of the main catalysts for gold remains subdued. However, Emkay believes a rate cut by the Fed remains likely before the end of the calendar year, driven by soft inflation and macroeconomic challenges.
The second potential trigger is the weakening of the US dollar. The Dollar Index has fallen by nearly 10 percent since the beginning of 2025, already reflecting in gold's performance. Emkay, however, believes a further drop in the dollar—possibly caused by rate cuts and declining yields—could create fresh upside for gold. The firm also pointed out that the US government's proposed $4.6 trillion in spending could place further strain on bond yields, complicating the dollar's outlook.
Overall, with global trade tensions intensifying and uncertainty clouding the economic outlook, investor interest in safe-haven assets like gold continues to grow. Emkay Wealth Management sees the current consolidation as a potential launchpad for higher gold prices, especially if the Federal Reserve initiates rate cuts and the US dollar weakens further. While silver has already taken the lead in the recent commodity rally, gold could soon follow with renewed strength amid the evolving macroeconomic backdrop.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NDTV
10 minutes ago
- NDTV
In US Trade Deal Race, India Seeks Lower Tariff Than Indonesia: Report
Indian officials are hoping to secure a trade deal with US President Donald Trump at a lower tariff rate than he'd agreed with Indonesia as New Delhi races to meet an August 1 deadline. Trump said Tuesday the US will impose a tariff rate of 19% on imports from Indonesia, down from a threatened 32%, and will be able to ship American goods to the country tariff-free. The US president later told reporters that the India deal would be "along that same line" and "we're going to have access into India." On Wednesday, he again said the US was "very close" to a deal with India. India is seeking more favourable rates than Indonesia and the 20% tariff Trump has said he'll impose on Vietnam, officials in New Delhi said, asking not to be identified because the discussions are private. The US and India are working toward a deal that would reduce proposed tariffs to below 20%, Bloomberg News previously reported, with a negotiating team currently in Washington to advance the talks. New Delhi is hoping for a tariff that would give it a competitive advantage against its peers in the region, officials said. India believes the US doesn't view it as a transhipment hub like Vietnam and other Southeast Asian nations, and negotiations so far suggest India's tariff rate would be better than those countries, one of the people said. The Ministry of Commerce and Industry didn't immediately respond to an email seeking further comment. GLOBAL INSIGHT: Delhi's Trade Math in Talks with Trump Soumya Kanti Ghosh, chief economist of State Bank of India, and a member of the prime minister's Economic Advisory Council, said the negotiating team would be hoping to bring the tariff down to below 10%. "And in the bargain, the US will expect significant concessions for its goods when they decide to enter India," he said. While India is unwilling to open up the agricultural and dairy sectors, it may give concessions in non-agricultural sectors, he said. India has already proposed to reduce tariffs on American industrial goods to zero if the US does the same. New Delhi has also offered greater market access to some American farm products, and has also raised the possibility of buying more Boeing Co. planes. Aside from Indonesia, Trump has also announced trade deals with the UK and Vietnam, and a truce with China. Trump said Jakarta had agreed to purchase $15 billion in US energy and $4.5 billion worth of agricultural products along with Boeing planes. The latest development shows that tariff rates are gravitating toward 15%-20%, a range that Trump himself has indicated as his preferred level, said Brian Tan, Barclays Plc's economist in Singapore. The tariff letters sent to trading partners so far are likely a negotiating tactic to bring governments back to the table with better offers for the US, he said, "allowing the Trump administration to secure superior 'deals'." Malaysia's trade minister said he's waiting to see the details of the Indonesia agreement and the country is still in negotiations with the US on its own tariffs, The Star reported. "Most importantly, we must ensure that this is a negotiation beneficial to both countries," Tengku Zafrul, minister of investment, trade and industry, was quoted by the newspaper as saying. "It must be win-win."
The Hindu
10 minutes ago
- The Hindu
Rupee rises 12 paise to 85.80 against U.S. dollar in early trade
The rupee rose 12 paise to 85.80 against the U.S. dollar in early trade on Thursday (July 17, 2025) amid a drop in global crude oil prices and a hope of a breakthrough in the ongoing India-U.S. trade talks. However, a strengthening dollar against overseas currencies and FII outflows prevented sharper gains in the local unit, according to forex traders. At the interbank foreign exchange, the rupee opened weaker at 85.93 against the U.S. dollar but moved into positive territory to 85.80, up 12 paise from its previous close. The rupee had declined 16 paise against the U.S. dollar to close at 85.92 on Wednesday (July 16, 2025). An Indian Commerce Ministry team is in Washington for another round of talks on the proposed bilateral trade agreement. The four-day talks, which started on Monday (July 14, 2025), will conclude on Thursday. U.S. President Donald Trump has said that the proposed trade deal with India would be on the lines of what America has finalised with Indonesia on Tuesday (July 15, 2025). "The rupee in a volatile move moved from 86.06 to 85.73 and then closed at 85.92 on Wednesday as dollar index was up. For today (Thursday), rupee is expected to be in the range of 85.75/86.25 with RBI resisting the currency pair near to 86.00 level," Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said. Brent crude, the global oil benchmark, was down 0.36% to $68.46 per barrel in futures trade. "Brent oil prices rose after U.S. data showed a sharper-than-expected drop in crude inventories, highlighting tight supplies, while investors remained cautious ahead of potential U.S. tariff announcements on 150 countries as part of his ongoing agenda prompting global efforts to avoid steeper import duties," Mr. Bhansali said. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17% to 98.55. On the domestic equity market front, the Sensex rose 119.05 points to 82,753.53 in opening trade, while Nifty was up 18.7 points to 25,230.75. Foreign institutional investors (FIIs) sold equities worth ₹1,858.15 crore on a net basis on Wednesday, according to exchange data.
&w=3840&q=100)
Business Standard
10 minutes ago
- Business Standard
Japan racks up trade deficit amid threat from Donald Trump's tariffs
Japan sank into a trade deficit of 2.2 trillion yen ($15 billion) for the first six month of this year, according to government data released Thursday, as exports were hit by President Donald Trump's tariffs. In June, Japan's exports slipped 0.5 per cent from a year earlier after its shipments of vehicles and other products were slapped with a 25 per cent tariff. Trump has postponed implementing that higher import duty until Aug. 1, to allow time for negotiations but so far no deal has been reached. Exports in June totaled nearly 9.2 trillion yen ($62 billion), in the second straight month of declines. Imports in June rose 0.2 per cent to 9 trillion yen ($61 billion), the Finance Ministry said. That left a trade surplus of 153 billion yen (just over $1 billion). The trade deficit in May was 637.6 billion yen, or $4.4 billion. Japan's exports to the United States fell 11 per cent in June, with auto exports plunging 25 per cent. Shipments to China decreased by nearly 5 per cent. Exports to Mexico, a major auto assembly hub for North America for Japanese automakers, fell nearly 20 per cent. In the first half of the year, Japan's exports totalled 53.4 trillion yen ($360 billion), up 3.6 per cent, while imports rose 1.3 per cent to 55.6 trillion yen ($375 billion). Japan and the US have been holding trade talks, with Japanese officials stressing that Japan is a key US ally. Trump has focused on rice, a sector traditionally protected from foreign competition for the sake of Japan's food security. Japan imports more than 300,000 tons of rice a year from the US, according to various data, although some of that is used for animal feed. Japan will hold an election for the Upper House of Parliament on Sunday. Given falling public support for Prime Minister Shigeru Ishiba's administration, the conservative and pro-business ruling Liberal Democratic Party could lose its majority unless it gains another coalition partner. Japan's economy contracted at an annual rate of 0.7 per cent in the first quarter of this year compared to the previous quarter, partly due to slowing exports.
