Tariff anxieties fuel gold's price increase, as market anticipates interest rate reduction.
The US economy is currently facing a shift in its monetary policy landscape, with recent economic data and job reports strengthening market expectations for US Fed rate cuts in September and possibly December. This comes amidst the potential appointment of Stephen Miran, a close associate of former President Donald Trump, to fill a vacant seat on the Federal Reserve's Board.
Miran, who was previously the chair of the Council of Economic Advisers and a Trump economic policy advisor, is expected to serve out Adriana Kugler’s unexpired term until January 31, 2026. His nomination, if confirmed, could bring a fresh perspective to the Fed's decision-making process, given his close association with Trump's economic agenda.
However, the specific details of Miran’s monetary policy stance are less clear. His views on Fed interest rate decisions could potentially lean towards policies that encourage growth or prioritize different economic objectives than current leadership. The Federal Reserve Chair, Jerome Powell, whose term runs until 2028, has publicly appreciated Kugler’s service, indicating some continuity in leadership tone.
The broader Federal Reserve leadership maintains significant influence over rate decisions. Current economic conditions, such as a dour jobs market and decreasing business activity and new orders, suggest a possibility of rate cuts. New board members like Miran could play a role in shaping future decisions on rate adjustments, depending on their economic outlook and policy approach.
Meanwhile, the US trade deficit narrowed to $60.2 billion in June 2025, the lowest since September 2023. This comes after the suspension period for reciprocal tariffs ended last Friday, resulting in high tariffs for major US trading partners. Tariffs for many goods from Canada are now 35%, for Brazil 50%, for India 25%, for Taiwan 20%, and for Switzerland 39%.
Investors are also showing increased interest in safe-haven assets like gold and silver. Gold prices for August delivery increased by $7.50, reaching $3,381.90 per troy ounce, while silver prices for August delivery increased by 49.50 cents, reaching $37.687 per troy ounce.
The ISM Services PMI decreased to 50.1 in July from 50.8 in June, indicating a slowdown in the service sector. Imports declined 3.7% to $337.5 billion in June 2025, while inventories decreased from 52.7 to 51.8.
In addition, Trump has hinted at a potential replacement of Fed Chair Jerome Powell, adding another layer of uncertainty to the Fed's future monetary policy decisions. As the economy continues to evolve, the role of new board members like Stephen Miran will be closely watched.
The potential appointment of Stephen Miran, a former Trump economic advisor and Council of Economic Advisers chair, could bring a new perspective to the Federal Reserve's decision-making process, particularly regarding Fed interest rate decisions, which could lean toward policies that encourage growth or prioritize different economic objectives than current leadership.
Given the narrowing US trade deficit and the suspension of tariffs with major trading partners, industry experts and investors are increasingly focusing on the role of new Federal Reserve board members like Miran in shaping future rate adjustments and the broader monetary policy landscape.
