The US dollar found modest support after dipping to its lowest in nearly two weeks, as traders turned cautious ahead of the weekend. This rebound in the greenback, alongside a fifth consecutive day of gains in Asian equities, prompted some profit-taking in gold on Friday. However, underlying uncertainty continues to offer a safety net for the precious metal. President Donald Trump’s decision to impose an additional 25% tariff on Indian imports, bringing the total to 50%, has rekindled fears of a full-blown global trade war. The penalties are tied to India’s continued purchase of Russian oil, and they come as Trump announced upcoming tariffs on semiconductors and pharmaceuticals, adding more fuel to an already tense global economic environment. These policy moves are impacting investor sentiment across asset classes. Notably, China’s central bank extended its gold purchases for the ninth straight month in July, signaling strategic demand that could lend strength to gold amid market instability. Boost your financial skills with professional trading courses from MJFXM – learn, trade, and grow with confidence.
Meanwhile, data released on Thursday by the US Labor Department revealed another uptick in jobless claims, climbing to 226,000—the highest since early July—reinforcing expectations that the Federal Reserve may be forced to pivot back to rate cuts. The CME FedWatch Tool now shows over a 90% probability of a rate cut in September, with markets anticipating at least two quarter-point cuts by the end of 2025. This dovish outlook, alongside growing economic fragility, is limiting upside for the US dollar and indirectly supporting safe-haven assets like gold. While the Federal Reserve is set to see changes in leadership—Trump has nominated Stephen Miran to replace Adriana Kugler and is reportedly evaluating four potential successors to Jerome Powell—this political uncertainty is also keeping markets on edge.
On the corporate front, tech stocks took a hit after Trump publicly demanded the resignation of Intel CEO Lip-Bu Tan due to alleged ties to Chinese entities, a move that rattled investor confidence. The backlash follows mounting political scrutiny over Tan’s past leadership at Cadence Design Systems, which had previously admitted to violating US export controls. Intel stock dropped over 2% following the president’s post, reflecting investor unease over potential regulatory fallout and rising geopolitical tensions.
In the energy sector, oil prices remained relatively flat in Asian trading but continue to bear the scars of a steep weekly decline. Markets are reacting to a mix of trade tensions, rising output, and softening demand signals. Trump’s expanded tariffs on major economies and fresh restrictions on Russian oil imports, particularly aimed at India, have raised concerns of slowing global demand. Although a drawdown in US crude inventories provided some cushion, the supply side is again under pressure as OPEC+ moves forward with its plan to increase production in September. As economic risks tied to Trump’s tariff agenda unfold and speculation around Fed leadership intensifies, the outlook for both commodities and equities remains clouded by volatility.