Gold prices lost more than 1% in the European market on Monday at the start of the week, hitting their lowest level in about a week and moving away from a two-week high due to correction and profit-taking, alongside weaker demand for the precious metal as a safe haven amid intensive talks between the United States and Russia to end the war in Ukraine.

The decline in gold prices comes despite the US dollar falling to a two-week low, pressured by strong expectations that the Federal Reserve will cut interest rates at least twice before the end of this year.

To reprice those expectations, investors this week are awaiting the release of key US inflation data for July, which will show the extent to which higher tariffs have affected domestic prices.

Price Overview

• Gold prices today: Gold fell by about 1.2% to $3,357.06, the lowest since August 5, from the opening level of $3,398.13, with a high of $3,405.26.

• At Friday’s close, gold prices rose by less than 0.1%, marking a second consecutive daily gain, and reached a two-week high of $3,409.10 an ounce.

• Last week, gold prices rose by 1.0%, the second consecutive weekly gain, supported by a weaker US dollar amid a series of weak US economic data releases.

US–Russia Talks

As part of diplomatic efforts to end the war in Ukraine, US President Donald Trump announced on Friday that he will meet with Russian President Vladimir Putin on August 15 in Alaska to discuss ways to reach a peace agreement to end the ongoing military conflict in Ukraine. This step comes within a series of US–Russia talks aimed at finding a negotiated solution to the crisis, amid international anticipation over the success of these efforts.

US Dollar

The US dollar index fell by more than 0.2% on Monday, nearing a two-week low of 97.95 points, reflecting the dollar’s decline against a basket of major and minor currencies.

Attention was focused on trade talks as the August 12 deadline set by Trump to reach an agreement between the United States and China approached.

US Interest Rates

• According to CME Group’s FedWatch tool: The probability of a 25-basis-point US interest rate cut at the September meeting is currently priced at around 88%, with a 12% probability of no change.

• The probability of a 25-basis-point cut at the October meeting is currently priced at 96%, with a 4% probability of no change.

• To reprice these expectations, investors this week are awaiting key US inflation data, which, along with labor market figures, the Federal Reserve will use to shape its monetary policy tools.

Gold Outlook

• Matt Simpson, Senior Analyst at City Index, said: “The easing of geopolitical tensions surrounding the war in Ukraine has further pressured gold, following Friday’s announcement that President Donald Trump will meet Vladimir Putin on US soil.”

• Simpson added: “Positive data could further boost the US dollar and limit gold’s gains, although I expect overall support to remain as investors look to take advantage of the dips.”

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by about 0.55 metric tonnes on Friday, marking a second consecutive daily increase, to a total of 959.64 metric tonnes — the highest level since September 16, 2022.

The euro rose in the European market on Monday against a basket of global currencies, resuming gains that had temporarily paused on Friday against the US dollar, approaching again its highest level in two weeks, supported by the weak performance of the US currency in the foreign exchange market.

Expectations for a European interest rate cut in September have declined due to entrenched inflationary pressures currently facing European Central Bank policymakers, and to reprice these expectations, investors are awaiting the release of more economic data in the euro area.

Price Overview

• EUR/USD today: The euro rose against the dollar by 0.3% to (1.1675$) from the opening price of (1.1640$), recording the day’s low at (1.1640$).

• The euro ended Friday’s session down 0.2% against the dollar, its first loss in four days, due to correction and profit-taking from the two-week high of 1.1699$.

• Last week, the euro rose by about 0.5% against the dollar, marking its second weekly gain in the past three weeks, driven by a series of bleak US economic data, especially from the labor market.

US Dollar

The US Dollar Index fell by more than 0.2% on Monday, nearing a two-week low at 97.95 points, reflecting the decline in US currency levels against a basket of major and minor currencies.

Attention remained focused on trade talks as the August 12 deadline set by Trump for reaching an agreement between the US and China approached.

According to CME’s FedWatch Tool: market pricing for a 25 basis point US interest rate cut at the September meeting is currently stable at 88%, while pricing for keeping rates unchanged stands at 12%.

To reprice these expectations, investors this week are awaiting the release of key US inflation data for July, which will show the extent to which higher tariffs have impacted prices and how much inflationary pressure Federal Reserve policymakers are facing.

European Interest Rates

• The latest eurozone inflation data showed persistent inflationary pressures on European Central Bank policymakers.

• According to some Reuters sources, a clear majority in the ECB’s latest meeting favored keeping interest rates unchanged in September, for the second consecutive meeting.

• Money market pricing for the ECB cutting European interest rates by 25 basis points in September is currently stable below 30%.

• To reprice these expectations, investors in the coming period will monitor the release of numerous economic data in Europe, as well as comments from European Central Bank officials.

The Japanese yen rose in the Asian market on Monday at the start of the week’s trading against a basket of global currencies, approaching again its highest levels in two weeks against the US dollar, as markets await the release of more economic data and comments that could provide strong evidence on the path of Japanese interest rates this year.

The US currency fell toward its lowest level in two weeks, pressured by strong expectations that the Federal Reserve will cut interest rates at least twice before the end of this year.

Price Overview

• USD/JPY today: The dollar fell against the yen by 0.2% to (147.43¥) from the opening price of (147.701¥), recording a high of (147.79¥).

• The yen lost 0.4% against the dollar at Friday’s close, its first loss in three days, as part of a correction and profit-taking from the two-week high at 146.62 yen, in addition to the release of grim economic data in Japan.

• The Japanese yen fell by 0.25% against the US dollar last week, marking its first weekly loss in three weeks, due to a recovery in US yields.

Japanese Interest Rates

• Minutes of the June monetary policy meeting showed that some members of the Bank of Japan’s board said the central bank would consider resuming interest rate hikes if trade tensions eased.

• Market pricing for the Bank of Japan raising interest rates by a quarter point at the September meeting is stable around 45%.

• To reprice these expectations, investors are awaiting more data on inflation, unemployment, and wages in Japan.

US Dollar

The US Dollar Index fell by more than 0.2% on Monday, nearing a two-week low at 97.95 points, reflecting the decline of the US currency against a basket of major and minor currencies.

Focus remained on trade talks as the August 12 deadline set by Trump for reaching an agreement between the US and China approached.

According to CME’s FedWatch Tool: market pricing for a 25 basis point rate cut at the September meeting is currently stable at 88%, while pricing for keeping rates unchanged stands at 12%.

To reprice these expectations, investors this week are awaiting the release of the main US inflation data for July, which will clarify the extent to which higher tariffs have affected prices and the degree of inflationary pressure faced by Federal Reserve policymakers.

On Wednesday, US President Donald Trump announced that the United States would impose a 100% tariff on imported semiconductor chips unless companies make a formal commitment to build or expand production facilities within the US.

The move aims to restructure the global semiconductor supply chain by encouraging domestic manufacturing. Major companies like Apple — which recently pledged over $100 billion in new US investments, raising its total commitment to $500 billion — stand to benefit from tariff exemptions. Leading chipmakers such as TSMC, Samsung, and SK Hynix are also expected to qualify due to ongoing or planned production projects in the US.

Markets reacted in mixed fashion: SK Hynix shares initially fell 3.1%, but quickly recovered after a South Korean trade envoy confirmed that both SK Hynix and Samsung would be exempt from the tariffs because of their US manufacturing commitments. Meanwhile, US stock futures rose as investor confidence grew that companies like Apple and Nvidia would be granted exemptions amid a broader push for local production.

The announcement fits within Trump’s broader protectionist approach, following a recent executive order that raised tariffs on India to 50% — a move tied to oil trade between New Delhi and Moscow. The chip tariff announcement came after a US Commerce Department investigation into semiconductor imports, citing national security concerns. The administration’s message is clear: foreign firms must invest in the US or face punitive tariffs.

However, experts warn that this action could disrupt global supply chains, drive up consumer prices, and create logistical challenges. Semiconductors are vital to industries ranging from automotive to renewable energy, and any disruption could have widespread repercussions.

Industrial leaders are already adjusting their investment and production strategies. Still, analysts remain cautious, noting that many of the announced commitments may be rebranded old plans rather than immediate factory expansions.

The situation is further complicated by how exemptions will be allocated — particularly for chip-producing nations such as the European Union, South Korea, and Japan. These countries are closely watching US policy, especially in light of recent trade deals that capped some tariffs at around 15%.

How Will Trump’s Chip Tariffs Work?

Trump announced the new chip tariffs at a White House event on August 6, stating that exemptions would be granted to companies committed to building chip manufacturing facilities in the US.

Details remain scarce — it’s still unclear when the tariffs will take effect or how they’ll impact chip-containing products like laptops.

“There are a lot of exceptions,” said Jason Miller, a supply chain professor at Michigan State University. “Until we see the specific harmonized tariff codes that the duties will apply to, it’s impossible to fully understand the consequences.”

The US already produces a significant number of semiconductors, exporting about $58 billion annually, according to US Census Bureau data. However, Miller noted that the US specializes in high-end chips, while less sophisticated, widely used chips are mostly imported from countries like Malaysia. The most advanced chips still come from Taiwan.

Data shows the US imports nearly $60 billion in chips each year. “The US is not cost-competitive in producing low-end, generic chips like those found in household appliances,” Miller said. “It makes more sense to focus on high-end products where we have a competitive advantage.”

Rogers agreed that expanding US chip manufacturing makes sense, pointing to progress made under the 2022 CHIPS and Science Act signed by former President Joe Biden. Still, he warned that chip industry expansion takes time — building new fabs and training skilled workers doesn’t happen overnight. “We’re on the right path,” he said, “but the road is long. We can’t ramp up fast enough to meet total domestic demand.” He also warned that the additional burden on companies could actually slow this progress.

What Does This Mean for Prices?

Experts told USA Today that these tariffs won’t impact manufacturers as dramatically as other duties — like the 50% tariff on steel and aluminum or the 25% on cars. However, they could still pressure companies already grappling with rising import costs.

“This action is not deflationary in any way,” said Miller. “But frankly, we can’t assess the inflationary impact until we know more.”

John Mitchell, president and CEO of the global electronics trade association IPC, said the tariffs could raise the prices of laptops, home appliances, cars, and medical devices.

“More than 60% of our member companies have reported that previous tariffs increased costs and delayed production,” he wrote in a statement.

For products like cars, chips may represent a small portion of total production costs. Still, Ivan Drury, Director of Insights at car research firm Edmunds, called the tariffs “another wound” for the auto industry — which already faces a 25% tariff on vehicle imports.

Automakers say they’re already incurring losses. General Motors said in July that tariffs cost it over $1 billion in Q2 alone. Stellantis estimated tariffs would cost it $1.7 billion this year.

“It’s death by a thousand cuts,” said Drury. Automakers are currently absorbing the costs, but he questioned how long that can continue: “We haven’t seen it show up in consumer prices yet, but shareholders won’t tolerate that forever.”

He also warned that used car owners could be hit hard by rising repair costs, as repair shops may pass higher chip prices directly to customers. More expensive repairs could also drive up insurance premiums.

“It’s a snowball effect,” he said. “It hasn’t hit yet — but we know disruption is coming.”

Could There Be a Shortage?

Another concern for consumers is whether the tariffs might make some products harder to find.

The US already experienced such a scenario during the COVID-19 chip shortage, which restricted access to new cars, laptops, and gaming consoles.

While the new chip tariffs aren’t expected to cause such a widespread shortage, Rogers warned that some companies may reduce output if import costs rise too high. Stellantis, for example, halted production at certain factories to avoid paying duties — a move that contributed to a 6% year-over-year drop in vehicle shipments in Q2.

“I think we could see shortages in several areas,” Rogers said. “It won’t be like 2021 when chips were unavailable altogether. But in this case, we’ll just have to pay more — and when things cost more, we tend to buy less.”