Gold steadies after rally, but nerves remain ahead of Trump’s tariff deadline

LONDON (July 2) Gold steadies as US fiscal deficits and looming July 9 tariff deadline keep investors cautious ahead of key data.

Gold (XAU/USD) prices held steady on Wednesday after a strong two-day rally, with spot prices hovering at $3,334.45 an ounce by mid-morning in London.

The metal has gained over 2% so far this week, reclaiming lost ground from last week’s Israel-Iran ceasefire drop-off, and is now consolidating its recent gains.

Behind the rally was a cocktail of fiscal fears and geopolitical tension. Traders are still digesting the US Senate’s narrow approval of President Trump’s tax-and-spend megabill – a sweeping piece of legislation that slashes taxes, bulks up defence and immigration spending, and is forecast to blow a $3.3 trillion hole in the national debt. Gold, unsurprisingly, likes the sound of that.

Add to that the growing tension over the tariff deadline, and the case for safe-haven exposure remains intact. The U.S. President says he won’t extend the deadline and plans to notify countries of the tariff rates they’ll face, suggesting the gloves are coming off.

Donald Trump overnight ramped up trade tensions, threatening 30–35% tariffs on Japanese imports unless a deal is struck before the 9 July deadline. He singled out Japan’s refusal to buy US rice, calling Tokyo “very tough” and casting doubt on any near-term agreement.

Fed Chair Jerome Powell’s latest remarks didn’t hurt either. While he’s not ready to pull the trigger on rate cuts just yet, he left the door open – a dovish enough signal for markets to keep betting on looser policy by September, if not sooner.

With tomorrow’s nonfarm payrolls coming up and the tariff clock ticking, gold’s next move could hinge on whether fear keeps winning out over fundamentals.