Gold Holds Loss As Trump Signals Openness To More Trade Talks

Summary:

Gold steadied following a modest drop on Monday after President Donald Trump said he was open to more tariff negotiations with major economies including the European Union.

Bullion was near $3,347 an ounce after dropping 0.4% in the previous session. Trump’s apparent willingness to extend trade talks eased haven demand, although it appeared at odds with his insistence that letters to governments setting tariff rates are “the deals” for trade partners.

The precious metal has surged by more than a quarter this year, hitting a record above $3,500 an ounce in April, as the US’s aggressive and erratic trade policy enhanced its appeal as a store of value in uncertain times. However, the rally has stalled over the last three months as investors wait for more clarity on the eventual contours of the new trade system, and on signs they’re hesitant to buy gold at such elevated levels.

“If trade talks deteriorate before August, we could easily see bullion retest or even breach its former highs,” said Fawad Razaqzada, a market analyst at City Index. “For now, the market seems firmly in wait-and-see mode, keeping the gold forecast leaning cautiously bullish.”

Gold rose 0.1% to $3,347.11 an ounce as of 8:26 a.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.1% after rising 0.3% on Monday. Silver edged higher, after hitting a 14-year-high in the previous session before closing lower. Palladium climbed, while platinum was flat.

Source: Bloomberg Europe

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Gerik

Economic

United States Remains Cornerstone Of Asian Automakers’ Strategies

For Toyota, Hyundai, Kia and their regional peers, North America continues to generate an outsized share of revenue and operating profit. Company filings show the region contributes roughly sixty percent of Hyundai-Kia’s earnings and more than forty percent of Toyota’s consolidated revenues. Even as President Donald Trump’s thirty-percent tariff threat rattles boardrooms, executives concede that walking away from the world’s most lucrative auto arena is not an option. Managers interviewed in Tokyo and Seoul confirmed privately that no retrenchment plans are on the table; instead, they expect to balance defensive cost measures with product-driven offensives.

The American consumer has pivoted sharply toward fuel-efficient hybrids as concerns over battery range, charging infrastructure and sticker prices continue to weigh on fully electric vehicles. That trend plays directly into the strengths of Toyota, which commands roughly two-thirds of the U.S. hybrid segment, and Hyundai-Kia, which has ramped up sales of its Ioniq, Tucson and Sportage hybrid variants. Analysts at Morningstar and Hanwha Investment agree that a rich hybrid portfolio affords higher pricing power and customer loyalty, creating room to absorb tariff-induced margin pressure without immediate price hikes. Weaker rivals reliant on low-margin fleet sales most notably Nissan are expected to cede share in this environment.

Tariffs Accelerate Localisation And Potential Industry Consolidation

While Toyota already builds more than half the vehicles it sells in America, Hyundai and Kia still import roughly two-thirds of U.S. volume. Trump’s tariff salvo is likely to accelerate their plans to expand Alabama and Georgia assembly lines and integrate a newly announced $21 billion U.S. investment programme that includes a captive steel mill and battery supply network. Research firm Euromonitor argues that the policy shock could speed consolidation: Mazda and Subaru, both partially owned by Toyota, may lean more heavily on their larger partner for joint production and purchasing. Investors are also revisiting the prospect of a rekindled Nissan-Honda tie-up after earlier merger talks collapsed.

Once viewed as the ultimate frontier, the Chinese market has tilted decisively toward domestic electric vehicle champions such as BYD and SAIC. Japanese and Korean brands, which built global footprints on internal-combustion and hybrid know-how, now face shrinking share and declining profitability in mainland China. By contrast, the United States offers higher transaction prices, stronger brand equity and ironically tariff protection that keeps disruptive Chinese EV imports at bay. Even with a hefty duty on finished vehicles, analysts call the United States the most rational place for Asian incumbents to defend and grow volume.

Short-Term Pain, Long-Term Opportunity

In the near term, tariffs will compress earnings: every ten-percent duty could shave up to 1.5 percentage points from Hyundai-Kia’s operating margin and about one percentage point from Toyota’s, according to Pelham Smithers Associates. Yet stronger players appear willing to sacrifice margin to preserve showroom traffic, betting they can outlast competitors in a “game of chicken.” They also see an opportunity to gain share from cost-sensitive brands that cannot absorb duties without raising retail prices.

Many Asian automakers have yet to release full-year guidance that incorporates Trump’s latest tariff levels. Equity analysts warn of potential downward revisions when second-quarter results arrive next month. While some investors argue punitive duties are already priced into sector valuations, others point to limited disclosure on hedging strategies and the cost trajectory of localisation projects. Surprises, therefore, remain possible.

Tariffs have unquestionably raised the cost of doing business for Asia’s legacy carmakers, but they have not diminished the strategic primacy of the U.S. market. With competitive hybrid technology, ongoing investment in American production and the buffer of Chinese EV import duties, Toyota, Hyundai-Kia and their peers appear prepared to navigate the turbulence. Whether they emerge stronger depends on execution: maintaining product appeal, scaling local supply chains and leveraging any shake-out to capture share from less resilient rivals.

Source: Reuters

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Alice Winters

President Donald Trump secured approval of his first judicial nominee of his second term, as the U.S. Senate confirmed a former law clerk to three members of the U.S. Supreme Court's conservative majority to a seat on a federal appeals court.

The Republican-led Senate voted 46-42 along party lines in favor of Whitney Hermandorfer, a lawyer serving under Tennessee's attorney general, to be appointed as a life-tenured judge on the Cincinnati-based 6th U.S. Circuit Court of Appeals.

She is the first of 15 judicial nominees the president has announced to date to secure Senate approval, as Trump and his Republican allies in the Senate look to add to the 234 judicial appointments Trump made in his first term.

With Hermandorfer's confirmation, Trump tied former President Joe Biden's total of 235 judicial appointments.

Such appointments could help Trump further shift the ideological balance of the judiciary to the right at a moment when White House officials have accused judges who have blocked parts of his immigration and cost-cutting agenda they have found to be unlawful of being part of a "judicial coup."

Republican Senate Majority Leader John Thune, ahead of a procedural vote on Hermandorfer's nomination on Thursday, said the goal was to fill around 50 judicial vacancies on the bench with judges who "understand the proper role of a judge."

He said judges should "understand that their job is to interpret the law, not usurp the job of the people's elected representatives by legislating from the bench."

In a statement after the vote, Republican Senate Judiciary Committee Chairman Chuck Grassley praised Hermandorfer's qualifications and said Republicans will push forward with nominations despite "obstruction" by Democrats.

Democratic Senate Minority Leader Chuck Schumer said on the Senate floor Monday that Trump is only interested in appointing "foot soldiers in black robes" to the courts.

Hermandorfer clerked for Supreme Court justices Samuel Alito and Amy Coney Barrett, and clerked for Justice Brett Kavanaugh while he was a judge on a federal appeals court in Washington, D.C. Barrett and Kavanaugh were appointed to the Supreme Court in Trump's first term, giving it a 6-3 conservative majority.

Hermandorfer has been leading a strategic litigation unit in Republican Tennessee Attorney General Jonathan Skrmetti's office, where she defended the state's near-total abortion ban and challenged a rule adopted under Biden barring discrimination against transgender students.

Senate Democrats had argued that Hermandorfer, 38, who is just a decade out of law school, lacked sufficient legal experience to join the bench and had shown a willingness to support extreme legal positions supporting Trump's agenda.

Source: Reuters

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Kevin Du

Australia’s consumer confidence edged higher in July as households’ assessment of their financial position improved even after the Reserve Bank shocked markets by keeping interest rates unchanged.

Sentiment advanced by 0.6% to 93.1 points, a Westpac Banking Corp. survey showed Tuesday, meaning pessimists persist in outweighing optimists with a dividing line of 100.

“Australia’s consumer sentiment recovery experienced another ‘false start’,” said Matthew Hassan, Westpac’s head of Australian macro forecasting. “While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA’s surprise move.”

Households polled before the rate decision reported an index reading of 95.6 while those surveyed after it reported an index read of 92, Westpac said.

The RBA has lowered borrowing costs twice this year and wrong-footed investors a week ago when it kept the cash rate at a two-year low of 3.85%, rather than cut. Governor Michele Bullock said the difference with the market was one of timing rather than direction, suggesting further easing is likely.

Traders are currently pricing two more rate cuts this year with a slight chance of a third.

“Assessments of family finances improved for the survey overall but showed a sharper pull-back following the RBA decision,” Westpac’s Hassan said. “Indeed, even with the RBA’s July surprise, consumers have become slightly more confident that interest rates will continue to move lower over the next year.”

In Australia, where consumption accounts for about half of the economy, households’ attitudes toward purchases are closely monitored by policymakers.

Source: Bloomberg Europe

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Gerik

Economic

Commodity

Price Pressures Persist Amid Geopolitical and Trade Frictions

Oil markets remained under pressure, with West Texas Intermediate (WTI) hovering around $67 per barrel and Brent near $69, following a sharp 2% drop on Monday. The immediate catalyst was U.S. President Donald Trump’s latest strategy to pressure Russia over the ongoing Ukraine conflict. Although Trump ramped up military aid for Ukraine and issued a 50-day ultimatum for a peace deal threatening 100% tariffs on countries buying Russian oil the lack of immediate action targeting Russia’s energy exports kept markets cautious rather than panicked.

Traders interpreted the move as more of a diplomatic signal than an operational disruption. With India and China among the primary importers of Russian crude, the effectiveness and timing of such secondary sanctions remain uncertain. As Matt Whitaker, U.S. ambassador to NATO, noted, the real impact will hinge on enforcement and international coordination, especially in energy trade flows.

Macro Headwinds Mount: Demand Fears Outweigh Supply Risks

Beyond geopolitics, broader macroeconomic challenges are adding downward pressure to crude prices. So far in 2025, oil is down roughly 7%, reflecting the drag of Trump’s aggressive trade policies, especially fresh tariffs aimed at major partners like the EU, Mexico, and potentially China. These moves have weakened global manufacturing and reduced transportation fuel demand critical components of global oil consumption.

China, the world’s top oil importer, continues to show signs of softening demand amid a faltering post-COVID recovery and industrial slowdowns. This is exacerbated by lingering deflationary pressures and weaker consumer activity, signaling that demand growth from Asia may fall short of expectations this year.

Meanwhile, OPEC+ countries have begun gradually easing their voluntary production cuts in response to domestic fiscal pressures and improving production capacity, increasing market supply. This rise in output, against a backdrop of slowing demand growth, raises concerns that the market may face a supply glut in the second half of the year.

Market Sentiment: Bearish Bias Holds, Awaiting Clarity

Traders are now watching for further developments in the U.S.-Russia tensions and the implementation details of the proposed sanctions. Until concrete actions emerge, price action may remain dictated by broader risk sentiment and macroeconomic indicators, particularly from the U.S. and China.

With WTI clinging near $67 and Brent slightly below $70, technical analysts point to $65 and $66 respectively as key support levels. A breach below could trigger a retest of the year-to-date lows, particularly if U.S. inventory data or Chinese economic releases disappoint.

Oil’s recent decline underscores the fragile balance between geopolitical risk and real-world fundamentals. While President Trump’s rhetoric toward Russia injects uncertainty, it has yet to materially restrict supply. Instead, trade disruptions, weakening demand in Asia, and rising OPEC+ output are taking center stage. Unless demand conditions improve or sanctions materially curb Russian supply, oil may remain stuck in a bearish cycle through the coming weeks.

Source: Bloomberg

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Daniel Carter

Political

Central Bank

Key points:

● Powell requests IG review of costs of Fed building renovation.

● US president has demanded Powell resign.

Federal Reserve Chair Jerome Powell has asked the U.S. central bank's inspector general to review the costs involved in the renovation of its historic headquarters in Washington, as Trump administration officials intensify their criticism of how the Fed is being run.

"I have asked the Board's IG to take a fresh look at the project," Powell told Senate Banking Committee Chair Tim Scott and the panel's top Democrat, Elizabeth Warren, in a letter dated Monday and viewed by Reuters.

The letter, first reported by Politico, responded to concerns raised by the Trump administration and Republican lawmakers about the renovation. The letter said that some features that had drawn criticism — including VIP elevators or dining rooms — had never been in the project's scope, and others, including new water features, had been eliminated. Changes to the original design were not substantial and "none of them added cost to the project," Powell wrote.

The request to Fed Inspector General Michael Horowitz, first reported by Axios, was made over the weekend, according to a source familiar with the matter.

It follows a letter to Powell last week from the director of the Office of Management and Budget, Russell Vought, who wrote that President Donald Trump was "extremely troubled" by cost overruns in the $2.5 billion project.

"The Chairman looks forward to receiving additional information about the costly renovations at the Fed's headquarters," a spokesperson for Scott said in response to the letter, adding that the letter was consistent with improving transparency.

The Senate Banking committee oversees the Fed.

In material posted to its website on Friday and summarized in Powell's letter to the senators, the Fed said the cost overruns were driven by factors including higher-than-estimated materials and labor costs, as well as toxic contamination in the soil that came to light during what is a complete rehabilitation of the nearly 100-year-old Marriner S. Eccles building and a neighboring property on Constitution Avenue in the nation's capital.

"We respect the critical importance of the constitutionally-derived congressional oversight of our activities, and we are committed to working collaboratively and cooperatively with you," Powell wrote to the senators.

OMB has no oversight over the Fed, which funds its own operations separately from the appropriations process in Congress. The Federal Reserve Act also gives the central bank's seven-member Board of Governors control over its building and related projects, with oversight by Congress and the Fed's independent IG, which has been reviewing the renovations throughout the process.

But Vought's criticism marked an escalation by the Trump administration against Powell and the Fed more broadly. Trump has been angry over the central bank's refusal to cut interest rates on his timetable. Fed officials have resisted cutting rates until there is clarity on whether Trump'stariffson U.S. trading partners reignite inflation.

Trump has said Powell should resign, but the president does not have the power to fire him over a monetary policy dispute.

Powell, who was nominated by Trump in late 2017 to lead the Fed and then nominated for a second term by Democratic President Joe Biden four years later, has said he intends to serve out his term as Fed chief, which ends on May 15.

A list of "frequently asked questions" about the project, posted by the Fed on Friday, included several raised by Vought and also addressed by Powell during a recent hearing in Congress, when the Fed chief clarified, for example, that contrary to some press reports there were no private elevators being installed to carry Fed officials to a private dining room.

The Eccles building, the Fed's main headquarters, was built during the Depression, during President Franklin Delano Roosevelt's administration.

The neighboring site at 1951 Constitution Avenue, which dates to the administration of Roosevelt's predecessor, Herbert Hoover, had been used by a number of agencies before being turned over to the Fed in 2018 by the first Trump administration "enabling them to renovate this historic property," Trump's General Services Administration said in a press release at the time. "This transfer will put a vacant building back in productive use, allow the Federal Reserve Board to consolidate several leases and result in savings for taxpayers," it said.

Source: Reuters

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