Key Developments:
- A U.S. trade court blocked most of President Donald Trump’s tariffs, causing industrial metals prices to rise.
- Gold prices increased by 0.2% to $1,296.63 per ounce after hitting a more than one-week low earlier in the session.
- The International Trade Commerce Court ruled that Trump overstepped his authority in imposing broad tariffs on U.S. trading partners.
- The Trump administration appealed the ruling quickly, indicating it might take the case to the Supreme Court if necessary.
- Washington has ordered a wide range of companies to stop shipping goods to China without a license and revoked permits granted to some suppliers.
Gold Rebounds on Lower-Level Buying and Economic Uncertainty
Gold prices rose on Thursday after touching a more than one-week low earlier in the session, following a U.S. trade court’s decision to block most of President Donald Trump’s tariffs. The focus now shifts to a key U.S. inflation report due on Friday.
Ricardo Evangelista, senior analyst at ActivTrades, stated: “There is an element of buying on the dip… along with continued economic uncertainty, particularly around U.S. debt and global trade tensions, which continues to support a positive outlook for gold despite recent events.”
Evangelista also noted, “The recovery is also related to the weakening dollar.”
Gold, considered a safe haven amid geopolitical and economic uncertainties, has reached multiple historical highs this year. Other precious metals also saw gains:
- Silver rose 1.2% to $16.37 per ounce.
- Platinum traded sideways at $1,074.77.
- Palladium advanced 0.8% to $969.45.
Industrial Metals Rise on Market Optimism Following Court’s Tariff Halt
Prices of industrial metals rose, driven by market optimism after a U.S. federal court halted Trump’s measure to impose broad tariffs on the majority of U.S. trading partners’ imports.
Ewa Manthey, ING’s metals analyst, explained that the rise in base metal prices is due to increased risk appetite resulting from the court’s decision, though she expects markets to remain volatile as the government fights back against the decision.
Copper and Other Base Metals Performance
Three-month copper on the London Metal Exchange (LME) gained 0.4% to $9,603.5 per tonne. Copper has rebounded nearly 19% since hitting a 17-month low of $8,105 in April when Trump imposed his reciprocal tariffs.
- Aluminum advanced 0.4% to $2,477.5 per tonne.
- Zinc improved 1% to $2,711.5 per tonne.
- Lead traded sideways at $1,982 per tonne.
- Nickel added 2.3% to $15,340 per tonne.
- Tin rose 0.1% to $31,650 per tonne.
Gains were capped by a firm U.S. dollar, which appreciated against a basket of six major currencies, making greenback-denominated metals more expensive for holders of other currencies.
U.S. copper futures Comex gained 0.9% to $4.75 per pound, placing the Comex premium over LME at $858 per tonne.
Key Questions and Answers
- Q: Who is President Donald Trump and why is he relevant in this context?
President Donald Trump is the current U.S. president who imposed broad tariffs on various imports from U.S. trading partners. His actions led to legal challenges, including a recent court ruling that blocked most of these tariffs.
- Q: What is the significance of the U.S. trade court’s decision?
The U.S. trade court determined that Trump overstepped his authority in imposing broad tariffs on U.S. trading partners’ imports, which led to a rise in industrial metals prices as market optimism increased.
- Q: How do economic uncertainties impact precious metals like gold?
Economic uncertainties, such as U.S. debt concerns and global trade tensions, contribute to gold being viewed as a safe haven. This perception supports a positive outlook for gold, causing its prices to rise despite recent events.
