Increased gold prices reach unprecedented levels due to Trump's trade tariffs' impact on the bullion market.
The Swiss Precious Metals Association is currently in active dialogue with stakeholders, addressing concerns about the potential impact of U.S. tariffs on the gold industry. This dialogue comes as the rise in gold futures and the associated impact on the U.S. role in the gold futures market is causing anxiety about global supply chains for the metal.
On Friday, U.S. gold futures reached a record high, with December contracts rising $3,494.10 per ounce as of late morning. This surge in gold futures is attributed to uncertainty over whether the Trump administration's country-specific import tariffs would apply to the most commonly traded sizes of gold bars.
The spread between U.S. gold futures and spot prices has widened, currently sitting at $100. Spot prices of gold eased to $3,394 per ounce but are up 0.9% for the week. This discrepancy indicates the market's unease and the potential for further volatility.
The potential application of country-specific tariffs on gold bullion bars in the U.S. is causing increased uncertainty and downward pressure on gold prices in the gold futures market. This volatility is particularly impacting trading centers like New York and Switzerland. When the U.S. government signaled tariffs on gold bars (specifically one-kilogram and 100-ounce bars), traders responded with jitters and a drop of over 1% in bullion prices as they awaited clearer guidance from the White House.
The rise in gold futures to record highs is part of what is being referred to as "GOLD RUSH 2.0: AMERICANS CASH IN AS PRECIOUS METAL HOVERS NEAR ALL-TIME HIGH." However, the uncertainty surrounding tariffs is casting a shadow over this bullish sentiment.
Switzerland, the world's leading hub for gold refining and transit, could be significantly impacted by a U.S. tariff on gold deliveries. The country is continuing to negotiate with the U.S. about reducing the levies on its goods.
Analysts are waiting for further clarity on the issue of U.S. tariffs on gold deliveries. Susannah Streeter, head of money and markets at Hargreaves Lansdown, stated that gold's panic ascent shows that even safe-haven assets are not immune to the volatility unleashed in the confusion of the tariff age.
Quentin Mai, CEO of West Point Gold, discussed the record-setting gold prices and the strength of the U.S. Dollar on 'Varney & Co.' The Financial Times first reported the news about the potential impact of tariffs on U.S. gold futures.
A ruling on the U.S. Customs and Border Protection Service's website suggests that the most widely traded gold bullion bars in the U.S. could be placed under country-specific tariffs. Gold bullion imports are subject to tariffs under this ruling, adding to the uncertainty in the market.
Reuters contributed to this report.
[1] This paragraph provides additional detail on the impact of tariffs on the New York futures market and Switzerland.
- In light of the potential impact of U.S. tariffs on gold imports, trading centers like New York and Switzerland are experiencing increased volatility in the gold futures market.
- The uncertainty surrounding U.S. tariffs on gold deliveries is casting a shadow over the bullish sentiment generated by gold's record high prices, as evidenced by the market's unease.
- The Swiss Precious Metals Association is actively negotiating with stakeholders to address concerns about the potential impact of U.S. tariffs on the gold industry, which has resulted in a widened spread between U.S. gold futures and spot prices.
- The spread between U.S. gold futures and spot prices, now at $100, indicates the market's unease and the potential for further volatility in the gold industry, particularly in trading centers like New York and Switzerland.
- Gold'spanic ascent, as reported by the Financial Times, shows that even safe-haven assets are not immune to the volatility unleashed in the confusion of the tariff age, as evidenced by the downward pressure on gold prices in the gold futures market.
