Tariff Confusion and Fed Rate Outlook Keep Gold on Edge

Treasury Secretary Scott Bessent suggested the Federal Reserve should consider a larger 50 basis-point rate cut at its September meeting, arguing that revised job data shows the Fed could have started cutting rates earlier. In a Fox Business interview, Bessent noted that weaker employment figures for May and June only became apparent after the Fed’s July meeting. He also discussed Trump’s Fed board nominee Stephen Miran, expressing hope he’ll be confirmed in time for the September meeting, and mentioned that the search for Jerome Powell’s successor remains wide open.

Gold prices rose on Wednesday, climbing 0.6% to $3,363.61 per ounce, as investors increasingly bet on a Federal Reserve interest rate cut in September. The rally was driven by mild inflation data and a weakening dollar, which made gold more affordable for international buyers. Markets are now pricing in a 96% chance of a rate cut next month, with gold benefiting as a traditional safe-haven asset that performs well in low-interest environments.

Gold extended its gains following the release of US inflation data that aligned with market expectations, reinforcing beliefs that the Federal Reserve will reduce interest rates in their upcoming meeting. While underlying inflation rose to its strongest level since the beginning of the year, subdued goods prices helped ease concerns about tariff-related pressures on the economy. The precious metal, which doesn’t pay interest and typically performs well in lower rate environments, has climbed approximately 28% year-to-date. Market participants remain watchful for clarity on whether gold bar imports will face tariffs, after confusion last week when the US Customs and Border

Switzerland’s precious metals lobby is urging U.S. President Donald Trump to make a formal commitment that gold will remain tariff-free. While Trump’s recent statement against imposing gold tariffs boosted market confidence, the Swiss association ASFCMP says only a binding decision will provide the certainty needed for global trade stability.

Trading.com CEO Peter McGuire expects gold and silver to surge in the second half of 2025, with gold possibly reaching $3,600–$4,000 and silver exceeding $40. He cites a weakening US dollar, an anticipated US rate cut, and strong investor demand as key drivers. While gold briefly corrected after US President Trump confirmed no tariffs on precious metals, McGuire believes Q3 and Q4 will be bullish for bullion, with silver showing greater percentage gains. He also predicts crude oil prices will decline in Q4 due to reduced geopolitical tensions, abundant supply, and falling inflation — factors that could lower energy costs