Gold prices fell and the U.S. dollar weakened after President Donald Trump delayed the implementation of 50% tariffs on the European Union on Sunday. Experts predict that a dip could be an “opportunity” to buy for the long term amid the ongoing policy uncertainty.
What Happened: President Trump threatened the EU with 50% tariffs on Friday and on Sunday extended the deadline for the imposition of the duties to July 9.
This led to a fall in the prices of the precious yellow metal and the US and Euro currency pair.
Aksha Kamboj, the executive chairperson at Aspect Global Ventures told Benzinga, “The recent tariff threat made by U.S. President Donald Trump on the European Union and the subsequent withdrawal in the early hours of the morning could result in some profit booking in gold prices, as sentiment turns towards risk assets like equities again.”
The extension led the futures of Dow Jones, S&P 500, and Nasdaq 100 indices higher, which ended lower on Friday after the announcement.
Kamboj also cautioned that the upside in gold prices could be “kept in check” due to Trump’s optimism over a deal with Iran in the near future.
This comes as the President hinted at “real progress” with regards to the nuclear talks between the U.S. and Iran, stating that he may have “good news” about it later this week.
However, Kamboj pointed out that the uncertainty around Trump’s fiscal policy on tariffs and tax cuts could propel the gold prices higher in the future.
“While there may be some near-term profit booking, the recent turn of events has highlighted the risks that come with the Trump administration and the ad-hoc tariff impositions, which makes gold a safe bet in light of any such future event. Therefore, any dip in gold prices could be used as a long-term accumulation opportunity,” said Kamboj, who is also the vice president of the India Bullion and Jewellers Association.
Meanwhile, the Euro US Dollar rose 0.40% to 1.1412 and the U.S. Dollar Index Spot fell 0.35% to 98.7620, as of the publication of this article.
“Furthermore, the euro has gained over the dollar and this is the beginning of a currency war, which will eventually affect gold prices,” warned Kamboj.
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Why It Matters: Trump announced in a Truth Social post on Sunday that he has agreed to a request from European Commission President Ursula von der Leyen to postpone the 50% tariff deadline from June 1 to July 9, 2025.
Trump expressed his willingness to grant the extension, describing it as his “privilege to do so.” The call comes amid heightened tensions over trade between the U.S. and the European Union.
Trump’s trade policies have been a cause for market instability. While this extension might provide some temporary relief, it doesn’t remove the fundamental risks tied to the ongoing trade dispute. –
Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Friday. The SPY was down 0.68% to $579.11, while the QQQ declined 0.93% to $509.24, according to Benzinga Pro data.
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