Gold Rallies as Trump's 50% EU Tariff Threat Sparks Risk-Off Move

Gold prices have surged 1.5% to $2,075 per ounce following former President Trump's threat to impose 50% tariffs on EU imports if elected, triggering a classic risk-off market reaction. The announcement has weakened the US dollar index by 0.6% and sent EUR/USD down 0.4% to 1.0780 as traders anticipate potential trade war escalation. Safe-haven flows have also benefited the Japanese yen, with USD/JPY dropping 0.8% to 154.20. The tariff threats have raised concerns about global economic growth and inflation, supporting precious metals as a hedge against uncertainty. European equity futures fell 1.2% while US futures declined 0.9%, reflecting widespread risk aversion. Technical analysis shows gold breaking above the key $2,050 resistance level, with next targets at $2,100 and the all-time high near $2,135. The geopolitical uncertainty adds to existing concerns about US deficit spending, creating a perfect storm for dollar weakness and commodity strength in the near term.