Bangkok: Gold prices are projected to experience significant fluctuations as the August 1 deadline for US import tariffs approaches, with potential outcomes heavily dependent on the progress of trade negotiations. If the US imposes high import tariffs on a country-by-country and product-by-product basis, and if trade negotiations stall, gold prices could surge to $3,500 per ounce. Conversely, a successful trade agreement with US trading partners could see gold prices drop to $3,200 per ounce.
According to Thai News Agency, Hua Seng Heng has been closely monitoring the increasingly tense global trade situation, emphasizing the significance of the US import tariff deadline on August 1. President Donald Trump's trade policy aims to enhance trade agreements and conditions with major trading partners, a development that investors are advised to watch carefully.
Thailand's Deputy Prime Minister and Finance Minister, Nanpichai Chunhavajira, recently disclosed that Thailand submitted its final tariff negotiation proposal to the United States on July 24. Hua Seng Heng highlighted that Trump's tariff hikes reflect the challenges of reaching a trade deal, as the US seeks to pressure trading partners into accepting its terms. More than 100 US trading partners anticipate receiving tariff notifications on August 1, with potential import tariffs ranging from 10% to 15%.
The European Union (EU), as the largest trading partner of the United States, faces a precarious situation given the unresolved conditions in ongoing trade negotiations. As the US has a significant trade deficit with the EU, the expectation is that Trump will issue a letter demanding higher import tariffs to compel the EU to soften its stance before the August 1 deadline. The EU is negotiating to avoid a trade war but is also prepared to retaliate with tariffs on US imports worth approximately 72 billion euros or 84 billion dollars if an agreement is not reached. A trade war between the US and the EU, given their substantial economies and high international trade levels, could have far-reaching impacts on the global economy.
Hua Seng Heng predicts that President Trump may ultimately implement high import tariffs on a country-by-product basis, with trade negotiations likely extending beyond the August 1 deadline. This scenario could sustain uncertainty around Trump's tariffs and global economic conditions.
In this context, gold is expected to regain its status as a safe haven asset if the US and EU fail to reach a trade agreement and the EU enacts a counter-tariff plan. Hua Seng Heng forecasts that in a normal scenario, gold prices could rise to $3,450, while in the best case, they might reach $3,500. Conversely, should the US secure trade deals with major partners like China and the EU, gold could experience significant sell-offs, with prices potentially adjusting down to $3,200-$3,250 in a normal scenario or falling to $3,120 in the worst case.