Gold surges to 5-week high amid tariff concerns

Today’s headlines

What’s happening: Gold prices rose sharply on Tuesday amid uncertainties around tariffs ahead of US President Donald Trump’s August 1 deadline.

What happened: Investors remained concerned as China prepared to hold further talks with the US and the EU threatened retaliatory tariffs.

Weakness in the US dollar also lent further support to gold prices.

Why it matters: Tariff concerns have triggered higher demand for safe haven assets, like gold. While several countries are in talks to reach trade deals with the US, there are wide speculations of the European Union not being anywhere close to reaching an agreement.

On Tuesday, US Treasury Secretary Scott Bessent announced plans to meet his Chinese counterparts in Sweden next week. In mid-May, both countries had agreed to suspend most of the heavy tariffs for 90 days, while continuing their trade talks. The agreed suspension is scheduled to expire on August 12.

Bessent also said that the US is set to announce several trade agreements with other countries.

Meanwhile, EU diplomats warned that they were considering imposing broader countermeasures on the US, with prospects of a trade deal fading.

Weakness in the US dollar provided a further boost to gold prices on Tuesday, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.5% to 97.39.

The yield on US 10-year notes declined to around two-week lows on Tuesday, raising the appeal for non-yielding gold among investors.

US gold futures gained 1.1% to settle at $3,443.70 an ounce on Tuesday.

In other metals trading, silver prices added more than 0.5% to close at $39.555, copper surged more than 1% to $5.7215 and palladium jumped to $1,324.40. Platinum bucked the trend and fell around 1% to $1,482.00.

What to watch: Investors will continue monitoring trade-related announcements, which are expected to significantly impact gold prices ahead.

The US Federal Reserve’s meeting next week will also remain in focus. Although the Fed is widely expected to keep rates unchanged next week, investors expect a rate cut in October.

The markets today

Coca-Cola Company in focus today after releasing its second-quarter earnings

Context: Shares of Coca-Cola edged lower on Tuesday despite the company posting better-than-expected quarterly earnings.

Details: The food and beverage giant topped quarterly estimates for the recent quarter. The beat was driven by higher prices, despite a decline in volumes in major markets.

Unit case volume slipped 1% during the quarter, as growth in Central Asia, China and Argentina was offset by a plunge in India, Mexico, and Thailand.

Net revenues rose 1% to $12.50 billion, compared to Wall Street expectations of $12.54 billion. Adjusted earnings of 87 cents per share for the second quarter topped consensus estimates of 83 cents per share.

Management reiterated their organic revenue growth estimate of 5%-6% in 2025. They revised their guidance for comparable earnings per share in the year to 3%, from their earlier projection of 2%-3%.

How shares responded: Coca-Cola’s shares fell 0.7% to close at $69.66 on Tuesday following the release of quarterly earnings. The stock has gained around 13% over the past six months.

What to watch: Investors will keep an eye on the company’s upcoming launch of a cane sugar-based beverage in the US this fall. Coca-Cola is expanding its product range due to a decline in the demand for sodas.

Other Markets: European indices closed mostly lower on Tuesday, with the DAX 40, CAC 40 and STOXX Europe 600 Index down by 1.09%, 0.69% and 0.41%, respectively, and the FTSE 100 up by 0.12%.

The news shaping the markets

Ukraine said former defence minister Rustem Umerov will head its delegation to the proposed negotiations to end the war with Russia. The news sent the RUB/USD pair lower in forex trading this morning.

Indian Prime Minister Narender Modi’s visit to the UK to sign a free trade agreement on Thursday lent support to the INR/USD forex pair.

The Philippines was slapped with 19% tariffs by US President Donald Trump. This being slightly lower than the initial 20% rate announced on July 9 sent the PHP/USD pair higher in forex trading this morning.

South Korea’s Composite Consumer Sentiment Index climbed to 110.8 in July, from 108.7 in the previous month. Consumer mood surging to its highest level since January 2018 lent support to the KRW/USD forex pair.

The American Petroleum Institute reported that US crude oil inventories fell by 577,000 barrels in the week ending July 18, compared to a gain of 840,000 barrels in the previous week. Despite this, WTI crude oil prices fell this morning.

What else to watch today

South Africa’s inflation rate (1200 UAE Time), UK’s Treasury Gilt 2040 auction (1300 UAE Time), Germany’s 10-year Bund auction (1330 UAE Time), US MBA mortgage applications (1500 UAE Time), existing home sales (1800 UAE Time), EIA crude oil stocks change (1830 UAE Time), EIA gasoline stocks change (1830 UAE Time), EIA Cushing crude oil stocks change (1830 UAE Time), EIA distillate stocks change (1830 UAE Time), 17-week Bill auction (1930 UAE Time) and 20-year Bond auction (2100 UAE Time), India’s M3 money supply (1530 UAE Time), Canada’s new housing price index (1630 UAE Time) and 2-year Bond auction (2000 UAE Time), Eurozone’s consumer confidence (1800 UAE Time), Russia’s corporate profits (2000 UAE Time) and industrial production (2000 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).