With Trump once again on the tariff warpath, gold prices are trading above $3400 (~ Rs 1 lakh). Additionally, the weak U.S. jobs report raises the possibility of a September FOMC rate cut, thus any declines in the price of gold could be temporary.

Tariffs Warpath starts again.

  • The most significant development last week was the signing of a broad executive order by US President Donald Trump that imposed additional reciprocal duties on imports from around 70 countries, ranging from 10% to 41%. India, Canada, Switzerland, Taiwan, and Brazil are some of the most severely affected nations.
  • At a time when worries about inflation are resurfacing, the action threatens to disrupt supply lines and intensifies tensions in global commerce. According to the executive order, the additional tariffs will generally go into effect on August 7, even though the original deadline was set for August 1.
  • The Trump administration has imposed a minimum 15% tariff on imports from about 40 countries with which it has a trade deficit and a universal 10% duty on imports from countries with which it has a trade surplus.
  • Furthermore, this week, U.S. President Donald Trump declared 50% tariffs on copper imports, with refined copper—the main metal in international trade—exempt. This exemption’s unexpectedly broad reach shocked markets and caused the price of copper and silver to plunge, despite the fact that it first seemed to guarantee supply chain stability.

Soft Jobs report boosts expectation of rate cut.

  • Expectations for a Federal Reserve interest rate cut in September were raised by weaker-than-expected US jobs data that was reported on Friday. The price of gold surged to a one-week high due to this and new tariff announcements.
  • According to the top US Nonfarm Payrolls report, the economy created 73K new jobs in July, compared to the predicted 110K. In addition, data for May and June were revised downward, suggesting that the US labour market is cooling even more.
  • The chairman of the Bureau of Labour Statistics was fired by US President Donald Trump just hours after the poor employment statistics were released. Adriana Kugler, the Fed Governor, also quit her job on the board of the central bank.
  • The Fed is under constant political pressure to reduce borrowing prices, which rekindles concerns about the central bank’s independence. This might help the yellow metal and limit any significant US dollar resurgence.

Geopolitical Tensions arise between Russia and Ukraine.

  • After former Russian President Dmitry Medvedev made aggressive remarks, Trump ordered the deployment of two nuclear submarines close to Russia, claiming that every new order from him would be interpreted as a threat and a step toward conflict.
  • Given the ongoing conflict between Russia and Ukraine, this increases the possibility of a further escalation of geopolitical tensions. This could prove to be an additional element providing some stability to the safe-haven asset and preventing further declines.

WGC GDT Report states Gold demand set to fall

  • Despite a modest increase in demand for investments, record-high prices are deterring jewellery purchases, causing India’s gold consumption to drop to a five-year low in 2025.
  • The demand for gold in the second-largest consumer of the precious metal in the world may drop from 802.8 tons last year to 600–700 tons in 2025, the lowest level since 2020.
  • If prices stabilise, demand might reach 700 tons, but a 10%–15% price increase brought on by geopolitical circumstances might push it to the lower end of the range.
  • India consumed 134.9 tons of gold in the April–June quarter, a 10% decrease from the same period last year. This was due to a 17% decline in jewellery demand and a 7% increase in investment demand.


Weekly Technical Outlook

  • Gold may continue its uptrend this week if uncertainty around tariffs and geopolitical tensions continues. Resistance lies at $3440-50 (~Rs 101,000) zone. If profit-booking continues, the downside support is around $3300 zone  (~Rs 97000).

Gold Oct Futures Daily Chart

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  • Silver prices are expected to continue rangebound momentum, taking support at $35.5(~Rs 107,000) and resistance around $37.5 (~Rs 112,000).

Silver Sep Futures Daily Chart

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Dr. Renisha Chainani, Head- Research, Augmont – Gold for all