New trade threat from US supports gold demand

Gold prices rose 0.4% on Tuesday amid ongoing uncertainty over US President Donald Trump's tariff plans and their potential impact on the global economy.

According to documents published in the Federal Register on Monday, the United States is investigating imports of pharmaceuticals and semiconductors. The goal is to determine whether heavy reliance on foreign supplies poses a threat to national security and whether tariffs can be imposed in those sectors.

Additional tensions were sparked by Trump’s announcement on Sunday, in which he promised to reveal the size of duties on semiconductor imports next week. This heightened caution in the markets.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic said that tariff risks and political uncertainty have put the economy “on pause.” At the same time, he urged the Fed to hold off on further monetary measures until the situation becomes clearer.

Gold, which does not generate interest income, has traditionally been used as a hedge against global risks and inflation. However, its attractiveness is waning in a high interest rate environment, according to Reuters.