Gold rises as fresh Trump tariff threats dampen trade talk hopes

Gold edged higher on Wednesday as U.S. President Donald Trump’s latest tariff threats dampened hopes for trade talks, but a stronger U.S. dollar and higher Treasury yields capped gains.

FUNDAMENTALS

* Spot gold rose 0.2% to $3,305.50 per ounce as of 0106 GMT. U.S. gold futures fell 0.1% to $3,314.50.

* On Tuesday, Trump said he would impose a 50% tariff on imported copper and introduce long-threatened levies on semiconductors and pharmaceuticals.

* The president sent tariff letters to 14 countries, including Japan and South Korea, on Monday, notifying them of higher tariffs from August 1. * The U.S. dollar index steadied after nearing a two-week high on Tuesday, while the yield on benchmark 10-year U.S. Treasury notes hovered near a three-week high.
* Higher yield increases the opportunity cost of holding non-yielding bullion, while a weaker dollar makes it more affordable for holders of other currencies.
* Meanwhile, recent national and global surveys of business executives highlighted the Federal Reserve’s dilemma in determining if slowing growth or persistent inflation is the greater risk to the U.S. economy.
* Business leaders expect this tension to persist as they plan price increases despite anticipating weaker revenue and demand, surveys of U.S. chief financial officers by the Fed and of global executives by Dun & Bradstreet revealed.

* Americans’ inflation outlook remained stable, with the New York Fed’s latest survey showing one-year inflation estimates at 3%, down from 3.2% in May, while the three- and five-year expectations stayed at 3% and 2.6%, respectively.

* The minutes of the Fed’s last meeting, due later on the day, will be studied by investors for clues into potential interest rate cuts amid the central bank’s wait-and-see stance.

* Spot silver fell 0.4% at $36.63 per ounce, platinum held steady at $1,360.38 and palladium lost 0.3% to $1,107.41. DATA/EVENTS (GMT) 0130 China PPI, CPI YY June.