Gold Holds Two-Day Rise With Tariffs And Interest Rates In Focus

Summary:

Gold steadied after a two-day climb as traders focused on tariff threats from President Donald Trump and the outlook for US monetary policy.

Bullion traded above $3,332 an ounce, after posting modest gains on Wednesday and Thursday that pared a weekly drop. The president proposed a slew of country-specific tariffs this week, including moves against Canada and Brazil, while pushing the overall deadline for implementation to Aug. 1. In addition, he’s planning a substantial levy on imports of copper.

Elsewhere, investors were considering the outlook for US interest rates. Policymakers have held borrowing costs steady this year, though a divide has emerged over how many rate cuts officials expect this half. Fed Bank of San Francisco President Mary Daly said she still views two reductions as likely, with a greater chance that the price effects from tariffs may be more muted than anticipated. Lower borrowing costs tend to benefit bullion.

Gold has rallied more than a quarter this year, setting a record above $3,500 an ounce in April. Trump’s erratic efforts to overhaul trade policies continue to serve as a steady source of uncertainty for markets, driving demand for havens amid worries about the long-term impact on the global economy. Theadvance has also been aided by heightened geopolitical tensions and central-bank buying.

Spot gold was 0.3% higher at $3,332.31 an ounce at 8:32 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver and palladium rose, while platinum fell.

Source: Bloomberg Europe

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Alexander

U.S. stock index futures fell on Thursday evening after President Donald Trump said Canada will face 35% trade tariffs from next month, ramping up concerns over the impact of his tariff agenda.

Futures reversed course after rising earlier following a record-high close on Wall Street, as technology stocks advanced.

S&P 500 Futures fell 0.5% to 6,290.75 points, while Nasdaq 100 Futures fell 0.6% to 22,877.0 points by 20:28 ET (00:28 GMT). Dow Jones Futures fell 0.5% to 44,676.0 points.

Trump announces 35% tariff on Canada, warns against retaliation

Trump on Thursday evening released a letter outlining a 35% trade tariff against Canada, effective from August 1. The new duties will be in addition to Trump’s recent sectoral tariffs.

Trump said the levy was in part aimed at pressuring Ottawa into stemming the illegal flow of fentanyl across its border and into the United States. The president also alleged unfair trade practices by Canada, in that Ottawa already had extremely high tariffs against several U.S. companies and sectors.

The tariffs will take effect from August 1, when a host of Trump’s other trade levies are set to take hold. The president released a slew of letters this week outlining tariffs against several major economies, including a 25% tariff each on South Korea and Japan, and a 50% tariff on Brazil.

Still, his tariffs announcements so far garnered limited negative reaction in markets, as investors doubted whether Trump’s tariffs will ever be fully imposed. The president has in several instances either postponed his tariff imposition or backed off from imposing the worst of his planned levies.

Wall St at record highs on tech gains

Technology stocks were a major driver of Wall Street’s recent rally, with investors piling into chipmakers on heightened optimism over artificial intelligence demand.

Some speculation over interest rate cuts by the Federal Reserve also buoyed U.S. stocks, although the central bank gave no clear clues as to when rates will be cut next.

Sentiment was cheered by market darling Nvidia (NASDAQ:NVDA) closing above a $4 trillion valuation for the first time ever, strengthening its spot as the world’s most valuable listed company. Gains in Nvidia also spilled over into broader markets.

But despite recent highs, Wall Street’s pace of gains appeared to be slowing, opening the door for some pullback, especially ahead of the second-quarter earnings season.

The S&P 500 rose 0.3% to 6,280.39 points, while the NASDAQ Composite rose 0.1% to 20,630.67 points on Thursday. The Dow Jones Industrial Average rose 0.4% to 44,650.70 points.

The second quarter earnings season will begin in earnest next week, with a host of major banks, including JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup Inc (NYSE:C), and Bank of New York Mellon (NYSE:BK) set to report on Tuesday.

Source: Investing

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Manuel

Commodity

Political

US regulatory actions to ensure oil and gas pipeline safety have plummeted to a record low for the start of a presidential administration as Donald Trump pushes to streamline the government and cut red tape.

The Pipeline and Hazardous Materials Safety Administration opened 40 enforcement cases between January 20 and the end of June, according to filings from the regulator. That’s the least for the beginning of any presidential term in data going back two decades and a 68% slide compared with Trump’s first months in office eight years ago.

The drop-off in enforcement comes as the White House backs fossil fuels in pursuit of “energy dominance” and moves to reverse regulations imposed by former President Joe Biden, arguing that they burden companies with unnecessary costs. It also coincides with an exodus of senior officials from PHMSA earlier this year amid a move to shrink the federal government.

PHMSA said the slowdown occurred because it was in the midst of issuing two revisions to its pipeline safety enforcement process. The changes, which took effect in May, concerned how the agency calculates civil penalties and discloses records.

“We didn’t want to be issuing new cases while we knew that those pretty significant changes to our process were underway,” Emily Wong, PHMSA’s director for governmental, international and public affairs, said in an interview.

Still, the agency has opened just five enforcement cases since early June, well below the monthly average of around 17, the data going back to 2002 show. PHMSA typically initiates cases when pipeline companies violate federal regulations, or to require steps to prevent future leaks or explosions. Its responses range from warning letters to orders requiring measures from operators. Oil and Gas Pipeline Safety Cases Plunge in First Months of Trump’s Second Term_1

Oil and Gas Pipeline Safety Cases Plunge in First Months of Trump’s Second Term_1

While it’s not unusual for enforcement activity to fall during the transition to a new presidential term, the drop in the first months of the Trump administration was steeper than usual. The low number of cases has stoked concern that a decline in oversight will lead to a ramp-up in pipeline accidents and their severity, putting people living near the conduits at heightened risk and allowing companies to evade accountability for repeat offenses.

Yvette Taylor, chair of the board of supervisors in Upper Makefield Township, Pennsylvania, is among those calling for stronger enforcement in her community. In late January, a leak was discovered on an Energy Transfer LP jet-fuel pipeline running through the town. The company later confirmed that the fuel had contaminated seven private water wells.

Yet several months later, Energy Transfer still hasn’t performed a full remediation of the site, state lawmakers Steven Santarsiero and Perry Warren wrote in a letter to Pennsylvania Department of Environmental Protection in June. Taylor says PHMSA should have ordered the company to shut the pipeline down completely.

“The Township and elected officials requested that the pipeline be shut down and the only response to date is to reduce the flow, which does not address the potential for future leaks,” she said. “We believe that as long as product is flowing through the pipeline, a leak can occur.”

Energy Transfer continues to conduct water tests, install advanced filtration water systems at no costs to residents and work with state, federal and local authorities to address the situation, a company spokesperson said in an email.

“Our work to remediate all impacted areas is ongoing as we are committed to the full cleanup and restoration” of the neighborhood affected, the spokesperson said.

Wong said PHMSA took “very swift and very firm corrective action” in addressing the incident in Upper Makefield, as well as an April spill from South Bow Corp.’s Keystone oil pipeline in North Dakota.

“Regarding Upper Makefield, PHMSA has made clear to the board of supervisors and the community in multiple public forums that we cannot shut down a pipeline without evidence it is hazardous to life, property, or the environment,” Wong said in an email.

“Our investigation is ongoing, but we have seen no evidence that suggests the Twin Oaks pipeline is still leaking or that there is cause for us to shut down the pipeline,” she added.

But some observers remain skeptical. If pipeline operators sense that there’s no one policing the industry, safety lapses could proliferate, said Bill Caram, executive director of the watchdog group Pipeline Safety Trust.

“I certainly worry that we’re going to see an increase in the amount of failures that happen and the severity of the failures that happen,” Caram said.

Source: Bloomberg

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James Whitman

Political

The State Department announced plans to lay off some US-based diplomats and other employees, after the Supreme Court ruled that the Trump administration can go ahead with plans to slash the size of the federal workforce.

The decision, detailed in a memo by Deputy Secretary of State Michael Rigas, didn’t specify the number of State Department staff who would be laid off. But the department had earlier told Congress it planned to cut about 2,700, or 15%, of its 18,000 US-based workforce through a combination of resignations and layoffs.

“The objective from the start was clear: focus resources on policy priorities and eliminate redundant functions,” Rigas said in the memo.

Senior State Department officials, briefing reporters on condition of anonymity, said the reorganization is meant to unwind a proliferation of Cold War-era offices they said are ill-suited to President Donald Trump’s “America First” foreign policy. They said it will consolidate redundant human resources, finance and accounting jobs.

They declined to provide details on the teams or number of people affected. But earlier reorganization plans called for downgrading the office that oversees democracy and human rights and shutting offices responsible for women’s issues, global health security, and diversity and inclusion.

The move comes with Secretary of State Marco Rubio in Kuala Lumpur, Malaysia, meeting with counterparts from Asia on issues including trade and security. He spoke Thursday with Russian Foreign Minister Sergey Lavrov about the administration’s efforts to broker peace between Russia and Ukraine.

The department’s plans had been on hold pending the resolution of legal challenges to the Trump administration’s authority to conduct mass firings of federal workers. But the Supreme Court ruled that Trump can move ahead with those plans, lifting a court order that had blocked more than a dozen federal departments and agencies — including State — from slashing their workforces.

The American Foreign Service Association, both a union and a professional organization for foreign service officers, “unequivocally opposes the State Department’s unilateral changes to the Foreign Service workforce reduction procedures,” according to a statement before the announcement.

The group said the changes “seriously weaken America’s ability to conduct foreign policy at one of the most critical geopolitical moments in recent memory.”

Source: Bloomberg

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Manuel

Central Bank

Political

White House budget director Russell Vought said in a social media post that Jerome Powell "has grossly mismanaged the Fed" as he published a letter sent to the central bank chairman raising concerns about renovations of the institution's Washington, D.C., offices.

“The president is extremely troubled by your management of the Federal Reserve system,” wrote Vought, director of the Office of Management and Budget. “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington DC headquarters.”

Powell's testimony about the renovations before a Senate committee last month, according to Vought, raised questions about the project’s compliance. Vought cited what he called cost overruns of more than $700 million, plans for rooftop terrace gardens, VIP private dining rooms and elevators, water features, and marble.

Vought also asked Powell a series of questions about the project and asked for responses in seven days, noting that the "administration takes this matter very seriously."

The letter from Vought is the latest in a series of new pressure points on Powell, who has become the target of President Trump's ire for months now. The president has called repeatedly for the chairman to lower interest rates.

In the last two weeks, Trump has said twice that Powell should resign immediately. On Tuesday, he said in response to a question from a reporter that "it’s OK with me" if Congress investigates the Fed chairman.

The reporter had asked Trump about accusations made by some Republican lawmakers that Powell had misled Congress about renovations at the Fed’s headquarters building.

"I think he is terrible," Trump added.

'Just inaccurate'

The comments that Powell made about the headquarters came as he testified before Senate lawmakers on June 25.

Republican senators asked him about media reports that described the expenses and features of the Fed renovation project and cited allegations that the cost of the renovation has increased by more than 30% to $2.5 billion.

Citing media reports, GOP senators said plans showed the renovated buildings will include rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite, and use of white marble with a private art collection in the basement.

Powell called the media reports quoted by senators “misleading and inaccurate,” saying that there was no VIP dining room nor new marble. Powell stressed that there are no new water features, no beehives, no rooftop terrace gardens, and no special elevators.

“So all the sort of inflammatory things that the media said are either not in the current plan or just inaccurate,” said Powell.

Vought in his letter said to Powell that his testimony raises serious questions about the project’s compliance with the National Capital Planning Act, which requires that projects like the Fed headquarters be approved by the National Capital Planning Commission (NCPC).

The NCPC approved a plan in 2021, Vought said, but Powell’s testimony “appears to reveal the project is out of compliance with the approved plan.”

That, he said, would be a violation of the National Capital Planning Act and require the Fed to halt construction and obtain a new approval from NCPC.

Vought said Powell’s comments led to a need for increased oversight from OMB in conjunction with the NCPC, a group that says on its website that it “represents federal and local constituencies with a stake in planning for the nation’s capital.”

The president appoints three citizens, including the chair, to that commission.

One of those appointees, James Blair, said on X on Thursday, just hours after being sworn in, "Today I expressed my grave concern with the public allegations by others that Federal Reserve Chairman Powell was not honest with the Senate Banking Committee in his late June testimony about design features of the Federal Reserve’s Headquarters Renovation Project.”

Blair is a longtime Trump ally currently serving as Trump's deputy chief of staff, where he has been involved in issues like passing the reconciliation package after a stint as political director of his 2024 campaign.

Blair added in his posts about Powell that he “shared with my co-commissioners that I would be requesting a review of all previous and current building plans for Fed’s HQ renovation project and will be requesting a site visit to the project immediately.”

The chair of the commission is White House staff secretary Will Scharf, who was previously one of Trump's personal attorneys and has gained attention only as his current role often has him handing Trump executive orders to be signed.

Another member of Trump's administration, Federal Housing Finance Agency Director Bill Pulte, has called for Congress to investigate Powell over the statements he made to Senate lawmakers about the renovations.

"I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed 'for cause,'" Pulte has said in a post on X.

'Not permitted under the law'

The increased pressure on Powell from the White House comes as the Trump administration is eager for Powell to exit the Fed as it considers its options for replacing the chair and putting its own imprint on the powerful central bank board that helps decide whether interest rates go up or down.

A top Treasury Department official told Yahoo Finance Wednesday he would like to see Powell step down from the central bank's Board of Governors after his term as chair ends next May.

"It has traditionally been the case that when a Fed chairman's term ends, and they're no longer going to be chairman, that they don't stay on the Board of Governors,” Deputy Treasury Secretary Michael Faulkender said to Yahoo Finance in an interview.

"I would hope that Chairman Powell follows tradition along those lines."

A new 14-year Fed board seat opens up with Fed governor Adriana Kugler's scheduled departure on Jan. 31. The administration is currently discussing who should fill that seat. It also hopes it will have a second seat to fill when Powell's chairmanship is up next May.

But Powell has not said whether he intends to give that up.

Powell has also been adamant that he cannot be removed by the president. When asked earlier this year whether the president could fire him, Powell simply said, “Not permitted under the law.”

The only language in law pertaining specifically to the removal of Fed board members can be found in Section 10 of the Federal Reserve Act. The law states that each member of the board shall hold office for 14 years "unless sooner removed for cause by the President."

The statute doesn't have any language that specifically addresses the chairman of the Board of Governors, nor does it detail what exactly constitutes "for cause." The term has been interpreted in legal rulings to mean “inefficiency, neglect of duty, or malfeasance."

But the Supreme Court did make it clear that it might protect the Fed in a May decision allowing President Trump to fire the board members of two other independent agencies.

The high court said "we disagree" with arguments made by members of the National Labor Relations Board and the Merit Systems Protection Board that their legal challenges "necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve’s Board of Governors or other members of the Federal Open Market Committee."

Source: Yahoo Finance

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James Whitman

Economic

U.S. President Donald Trump said he plans to impose 50% tariffs on all products from Brazil starting August 1, which could have a sharp impact on South America's agricultural powerhouse.

The U.S. is the second biggest destination for Brazil's exports behind China. Oil is Brazil's main export to the U.S., but the country is also an important market for Brazilian manufactured goods such as aircraft and machinery.

COFFEE

The U.S. has traditionally been the main destination for coffee from Brazil, the world's largest exporter. The U.S. accounts for 16.7% of all the coffee Brazil exports.

Four trade sources told Reuters that U.S. coffee roasters would not be able to pay 50% more for the beans, while Brazilian exporters could not cut prices at the necessary level, which could lead roasters to source their beans elsewhere, while Brazil would likely divert cargos to Europe and Asia.

BEEF

The U.S. is the second largest market for Brazilian beef. Brazilian meatpacker Minerva said the tariffs would cut its net revenue by as much as 5% annually. Other major meatpackers, such as JBS and Marfrig, have a large part of their operations in the U.S., which would likely insulate them from a large impact.

The tariffs could raise beef prices in the U.S. that are already at record highs.

ORANGE JUICE

Trump's new tariff could severely impact Brazil’s orange juice industry, the world’s largest producer, industry group CitrusBR warned on Friday.

In the 2024/25 harvest, which ended on June 30, the U.S. accounted for 41.7% of Brazilian orange juice exports, making it a key market for the sector. CitrusBR said the tariff would be "unsustainable," as profit margins in the industry are too narrow to absorb the additional costs. Other importers would not be able to offset the decline in shipments to the U.S., the group added.

OIL

Exports to the United States accounted for approximately 13% of Brazil's total oil exports last year, government data compiled by commodities consultancy StoneX showed.

The loss for Brazil from the tariff would be relatively "modest," according to BTG Pactual analysts, since the sector has greater commercial flexibility and logistical capacity to redirect shipments to other markets. The U.S. is also not expected to feel the pinch deeply, as Brazil supplied less than 3% of what the U.S. has consumed so far in 2025, according to StoneX.

AIRCRAFT

Brazil's Embraer, the world's third-largest aircraft manufacturer with a huge market in the U.S. for its executive planes and regional jetliners, would be one of the companies most affected by the tariffs.

Brazilian aircraft exports to the U.S., particularly airplanes, represented around 63% of its total aircraft exports last year, according to analysts at BTG bank.

TIMBER

The U.S. accounts for more than 40% of the total timber exported by Brazil last year, according to BTG bank analysts.

Forest products from Brazil would become less competitive in relation to other nations, such as Canada and Chile, said Cogo Inteligencia em Agronegocio, a consultancy.

Suzano, a pulp giant with around 15% of its revenues in the U.S., could face difficulties in the short term, but the company benefits from having low costs, flexibility to reallocate volumes and global scale, according to a Citi report.

MACHINERY, ENGINES AND ELECTRONICS

The U.S. was the destination for around 60% of all exports from Brazil's engine, machinery and generator industry, according to a chart from BTG. The tariff will hurt motor maker WEG, said UBS BB analysts.

The U.S. is also the main destination for Brazilian electronics, according to the Brazilian Electrical and Electronics Industry Association.

Source: Reuters

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Manuel

China–U.S. Trade War

Economic

U.S. President Donald Trump said he plans to impose 50% tariffs on all products from Brazil starting August 1, which could have a sharp impact on South America's agricultural powerhouse.

COFFEE

The U.S. has traditionally been the main destination for coffee from Brazil, the world's largest exporter. The U.S. accounts for 16.7% of all the coffee Brazil exports.

BEEF

The tariffs could raise beef prices in the U.S. that are already at record highs.

ORANGE JUICE

Trump's new tariff could severely impact Brazil’s orange juice industry, the world’s largest producer, industry group CitrusBR warned on Friday.

OIL

Exports to the United States accounted for approximately 13% of Brazil's total oil exports last year, government data compiled by commodities consultancy StoneX showed.

AIRCRAFT

Brazilian aircraft exports to the U.S., particularly airplanes, represented around 63% of its total aircraft exports last year, according to analysts at BTG bank.

TIMBER

The U.S. accounts for more than 40% of the total timber exported by Brazil last year, according to BTG bank analysts.

Forest products from Brazil would become less competitive in relation to other nations, such as Canada and Chile, said Cogo Inteligencia em Agronegocio, a consultancy.