Gold prices rose in the European market on Friday, marking a third consecutive day of gains as safe-haven buying intensified following U.S. President Donald Trump's announcement of a new round of tariffs.

The upside for the precious metal was capped by a stronger U.S. dollar in the forex market, amid growing signs of turmoil in global trade.

Expectations of a U.S. interest rate cut in September have increased after the minutes from the latest Federal Reserve meeting strengthened speculation of policy easing before year-end.

The Price

• Gold prices today: Gold rose by 0.6% to $3,343.88 per ounce, up from an opening level of $3,323.99, with an intraday low of $3,321.87.

• On Thursday, gold settled with a 0.3% gain, its second straight daily rise, supported by Trump’s tariff actions.

U.S. Dollar

The U.S. Dollar Index climbed 0.35% on Friday, posting its second consecutive daily gain and nearing a two-week high of 97.92 points, reflecting persistent strength against a basket of major and minor currencies.

As is well known, a stronger dollar makes dollar-priced bullion less attractive to holders of other currencies.

Trump Tariffs Shake Trade Outlook

Global trade chaos escalated after President Trump announced additional tariffs, stating his intention to impose broad-based duties of 15% or 20% on most of the United States’ trade partners.

Trump confirmed a 35% tariff on goods imported from Canada. In a post on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs will take effect on August 1 and may increase if Canada retaliates.

He also said the European Union could receive a tariff notice by Friday, casting doubt over the progress of U.S.-EU trade talks.

Brazilian President Luiz Inácio Lula da Silva said he hopes for a diplomatic solution to Trump’s threat of a 50% tariff on Brazilian imports, but vowed to respond in kind if the tariffs are enacted on August 1.

Trump additionally threatened a 50% tariff on imported copper and reiterated his intention to target semiconductors and pharmaceuticals with new tariffs.

U.S. Interest Rates

The minutes of the latest Federal Reserve meeting showed that most policymakers believed rate cuts would be appropriate later this year.

Following these details, and according to the FedWatch tool from CME Group, the probability of a 25 basis-point rate cut at the July meeting rose from 5% to 8%, while the probability of leaving rates unchanged fell from 95% to 92%.

The probability of a 25 basis-point rate cut at the September meeting increased from 62% to 72%, while the probability of keeping rates unchanged dropped from 38% to 28%.

Gold Outlook

• Tim Waterer, Chief Market Analyst at KCM Trade, said: “Despite the escalation of Trump’s tariff wars, gold hasn’t received the level of support it once did, as investors have grown accustomed to both the tariff narrative and Trump’s policymaking style.”

• He added that the simultaneousrise of the U.S. dollar and gold may have limited the precious metal’s upside.

SPDR Gold Trust

Holdings in the SPDR Gold Trust—the world’s largest gold-backed ETF—rose by 1.44 metric tons on Thursday, marking a second consecutive daily increase. Total holdings now stand at 948.81 metric tons, the highest since June 30.

The euro declined in the European market on Friday against a basket of global currencies, extending its losses for a third consecutive day against the U.S. dollar and nearing a two-week low, putting it on track for a weekly loss. The decline comes amid expectations that the European Union will receive a formal U.S. tariff letter later today.

Recent core inflation data from Europe has increased uncertainty around the likelihood of a European rate cut in July, as investors await further key economic indicators from the eurozone.

The Price

- EUR/USD today: The euro fell 0.3% to $1.1664, down from the opening price of $1.1699, after hitting a session high of $1.1707.

- The euro ended Thursday down roughly 0.2% against the dollar, its second straight daily loss, after touching a two-week low at $1.1662.

Weekly Performance

Over the course of the week, which officially concludes at Friday’s settlement, the euro is down about 0.9% against the U.S. dollar. This puts the common currency on track for its first weekly loss in three weeks, driven by profit-taking after reaching a four-year high of $1.1830.

U.S. Dollar

The U.S. dollar index rose 0.35% on Friday, extending gains for a second session and approaching a two-week high at 97.92 points, reflecting continued strength in the greenback against a basket of major and minor currencies.

The dollar’s rise comes amid mounting signs of disruption in global trade, after President Donald Trump announced additional tariffs. He said he intends to impose blanket tariffs of 15% or 20% on most of America’s trading partners.

Trump also confirmed a 35% tariff on goods imported from Canada. In a message posted on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs would take effect on August 1 and could increase further if Canada retaliates.

Potential Tariffs on the European Union

Trump stated on Thursday that the European Union may receive a formal tariff letter by Friday, casting fresh doubt over the progress of trade talks between Washington and Brussels.

Earlier this week, European sources familiar with the matter told Reuters that the EU might not receive a tariff letter and could potentially be granted exemptions from the 10% U.S. base tariff.

European Interest Rates

- The eurozone’s headline consumer price index rose 2.0% year-on-year in June, in line with market expectations, after a 1.9% increase in May.

- According to Reuters sources, a clear majority at the latest European Central Bank meeting favored keeping interest rates unchanged in July, with some members even calling for a longer pause.

- Current money market pricing suggests a 30% probability of a 25-basis-point rate cut by the ECB in July.

- To reprice those odds, investors will be closely watching upcoming economic data from across the eurozone, as well as remarks from ECB policymakers.

The Japanese yen declined in Asian markets on Friday, resuming its losses after a two-day pause against the US dollar, edging closer once again to its lowest level in two weeks. The currency is now on track for its largest weekly loss in 2025, amid escalating chaos in global trade as Donald Trump announced further tariffs.

Despite rising expectations of a rate hike by the Bank of Japan at its late-July meeting, markets remain focused on upcoming key economic data from Tokyo, including figures on inflation, wages, and unemployment in the world's third-largest economy.

The Price

- Yen exchange rate today: The dollar rose by 0.55% against the yen to ¥147.04, up from the opening rate of ¥146.23, after hitting a low of ¥146.13.

- On Thursday, the yen posted a marginal gain of less than 0.1% against the dollar, marking its second consecutive daily gain as part of a rebound from its two-week low at ¥147.18.

Weekly Performance

Over the course of this week—which officially concludes at Friday’s settlement—the yen is currently down about 1.75% against the US dollar, putting it on track for its steepest weekly decline of 2025.

Trade Turmoil

Global trade turbulence has intensified after US President Donald Trump announced a new wave of tariffs, stating his intention to impose broad 15% to 20% tariffs on most of America’s trading partners.

Trump announced a 35% tariff on goods imported from Canada. In a message posted on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs would take effect on August 1 and would increase further if Canada retaliated.

Trump also stated on Thursday that the European Union may receive a formal tariff letter by Friday, raising doubts about the progress of trade talks between Washington and the EU.

Brazilian President Luiz Inácio Lula da Silva said he hopes to find a diplomatic solution to Trump’s threat of a 50% tariff on Brazilian imports, but vowed to respond in kind if the tariffs go into effect on August 1.

Comments and Analysis

- Francesco Pesole, FX strategist at ING Bank, said markets are still digesting the recent tariff surprises, but there’s hesitation in trying to predict Trump’s next move.

- Pesole added: “I believe the general consensus still holds that Trump won’t impose new tariffs on China and will likely reach an agreement with the European Union.”

Japanese Interest Rates

- Last week’s data from Tokyo showed household spending in Japan rose by 4.7% year-on-year in May, marking the fastest pace since August 2022. The result far exceeded market expectations of a 1.3% rise, after a 0.1% decline in April.

- Following the data, market pricing for a potential 25-basis-point rate hike by the Bank of Japan in July increased from 40% to 45%.

- To reassess those odds, investors are now awaiting further data on inflation, unemployment, and wage growth in Japan.

The Australian dollar climbed against most major currencies on Thursday after markets absorbed the central bank’s latest monetary policy decision.

In a statement released early Tuesday, the Reserve Bank of Australia said it had decided to leave its benchmark interest rate unchanged, noting that it “needs more information to ensure inflation is steadily moving toward the 2.5% target.”

In the press conference following the meeting, Governor Michele Bullock said it was appropriate to adopt “a cautious and gradual approach to monetary easing,” but added that the bank could foresee further rate cuts if inflation slows as expected.

The decision came as a surprise, as markets had largely priced in a rate cut, prompting the Australian dollar to recover after losing nearly 1% on Monday.

As of 20:48 GMT, the Australian dollar rose 0.8% against the US dollar to 0.6588.

Canadian Dollar

The Canadian dollar also edged higher, rising 0.1% versus the greenback to 0.7316 by 20:48 GMT.

US Dollar

The US dollar index climbed 0.1% to 97.6 points by 19:40 GMT, after hitting a high of 97.9 and a low of 97.2 during the session.

President Trump announced Wednesday evening that a 50% tariff on imported copper would take effect on August 1.

He also imposed a 50% tariff on imports from Brazil, partially in response to the trial of former Brazilian President Jair Bolsonaro for his alleged role in attempting to overturn the results of the 2022 election.

Trump added that the decision was also due to what he described as a “very unfair trade relationship” with Brazil, calling it “far from reciprocal treatment.”

For his part, Brazilian President Luiz Inácio Lula da Silva said his country would respond to the US’s 50% tariffs in line with the principles of reciprocal economic treatment.

Government data released today showed that initial jobless claims in the US fell by 5,000 to 227,000 in the week ending July 5, while analysts had expected an increase to 235,000.