Gold steady after Trump unveils steeper tariffs, Treasury yields weigh

– Gold prices steadied on Tuesday as U.S. President Donald Trump announced sharply higher tariffs on goods from Japan, South Korea and other nations, while higher U.S. treasury yields capped gains.

FUNDAMENTALS

* Spot gold fell 0.1% to $3,331.89 per ounce as of 0035 GMT. U.S. gold futures were steady at $3,341.80.

* On Monday, Trump began telling trade partners, including Japan and South Korea, that sharply higher U.S. tariffs would start on August 1, marking a new phase in the trade war he launched earlier this year.

* The August 1 effective date for U.S. tariffs was firm, Trump emphasised but added he was open to extensions if countries made proposals. * “Reciprocal tariffs” were capped at 10% until July 9 to allow for negotiations, but only agreements with Britain and Vietnam have been reached so far.
* The yield on benchmark U.S. 10-year notes hovered near a two-week high, while the U.S. dollar index shed 0.1%.
* A higher yield increases the opportunity cost of holding non-yielding bullion, while a weaker dollar makes it more affordable for holders of other currencies.
* The Trump administration will not immediately impose a new 10% tariff against members of the developing nation BRICS bloc but will proceed if countries take so-called “anti-American” policy actions, according to a source familiar with the matter.

* Trump’s tariff policies have stoked inflation fears, further complicating the Federal Reserve‘s path to lower interest rates. The minutes of its June meeting, expected on Wednesday, should offer more clues into its policy outlook.

* A paper published jointly by the San Francisco and New York Federal Reserve banks suggests the possibility of the Fed cutting its short-term rate target to near-zero levels in the coming years despite current relatively high borrowing costs.

* Spot silver lost 0.5% to $36.74 per ounce, platinum shed 1.5% to $1,370.46 and palladium fell 2.1% to $1,170.46.