Gold prices edged up a bit in Asia today, continuing their recent climb. Investors are feeling a little nervous because of the possibility of the U.S. President, Donald Trump, raising tariffs on imported goods. This nervousness drove  investors to safe haven assets. Safe haven demand was also buoyed by reports that Trump planned to send offensive weapons to Ukraine, potentially escalating a conflict with Russia. 

Physical demand, however, stayed subdued in Asia due to high prices and seasonal weakness, with Chinese premiums steady at $10–$25 an ounce and Indian discounts narrowing to $8 per ounce amid tight local supply and low imports in May and June. Typically, India’s gold demand softens during the monsoon season, while premiums in Hong Kong and Singapore hovered at modest levels.

President Donald Trump’s aggressive tariff moves—including a fresh 35% levy on Canadian imports from August 1 and plans for 15–20% blanket duties on most other trade partners—fueled investor anxiety over global growth and inflation. This was compounded by his push for a dramatic 300 bps cut in the Fed funds rate, which stirred speculation about a dovish tilt in US monetary policy and raised concerns about longer-term inflation risks.

Further compounding this anxiety is President Trump’s aggressive push for a significant 300-basis-point reduction in the Federal funds rate. This call has ignited speculation about a potentially dovish shift in U.S. monetary policy, raising concerns among some market participants about longer-term inflation risks. In such an environment, gold, often seen as a hedge against inflation and economic uncertainty, typically finds favor.

Despite the macro tailwinds, physical demand for gold in Asia remained subdued. Elevated prices and seasonal weakness, particularly as India enters its monsoon season, contributed to softer buying. Chinese gold premiums held steady at a modest $10-$25 an ounce, while Indian discounts narrowed to $8 per ounce, reflecting tight local supply and a slowdown in imports during May and June. Premiums in key trading hubs like Hong Kong and Singapore also hovered at modest levels.