Gold prices inched higher on August 7 as investor nerves tightened over fresh tariff tensions between India and the United States. A surprise move by President Donald Trump to impose an additional 25% tariff on Indian imports has revived safe-haven appetite, giving gold the edge in a jittery global market.
Spot gold climbed 0.3% to $3,378.18 per ounce in early trade, while US gold futures rose 0.4% to $3,445.60. Analysts suggest the yellow metal is creeping closer to the key psychological mark of $3,400, as risk assets reel from the intensifying trade rhetoric.
The escalation comes after the US president on August 6 approved a 25% tariff hike on Indian imports, citing New Delhi’s continued purchase of Russian oil. Talks between the two countries had hit a deadlock, and this move has widened the trade rift.
The tariff, which takes effect 21 days after August 7, is expected to raise duties on some Indian goods to as high as 50%—making them among the most heavily taxed products in US trade.
Adding to the surprise, Trump also announced a 100% tariff on imported semiconductors but softened the blow by exempting firms that manufacture within the US or plan to set up domestic units.
Back home, the impact was visible in Kerala’s retail gold prices, with 22-carat gold priced at ₹9,400 per gram, and ₹75,200 per sovereign (8 grams) as of August 7. Dealers say the demand is steady, but buyers are watching price swings closely amid the tariff noise and rate cut speculation.
The dollar index is now hovering near its lowest level in over a week, following softer-than-expected US jobs data. That’s triggered a wave of bets on an interest rate cut in September.
According to CME Group’s FedWatch Tool, traders are now factoring in a 95% chance of a 25 basis point cut next month. Even Minneapolis Fed president Neel Kashkari hinted that a rate trim may be needed to keep up with a slowing economy.
For gold, lower rates typically mean higher shine. The metal doesn’t yield interest, so it becomes more appealing when returns elsewhere dip.
