Gold breaks records after reports of US imposing import tariffs
Kyiv • UNN
US gold futures hit a record high, exceeding $3534.10, due to the imposition of tariffs on bullion imports. This caused a widening spread between futures and spot prices.
US gold futures hit a record high on Friday after reports that Washington imposed tariffs on 1 kg gold bar imports, widening the spread between New York futures and spot prices, UNN reports with reference to Reuters.
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December US gold futures jumped 1% to $3489.40 after reaching a record $3534.10.
The spot gold price was virtually unchanged at $3399.22 per ounce as of 09:35 GMT (12:35 Kyiv time). Bullion has shown growth for the second consecutive week, adding about 1% since the beginning of the week.
The spread between futures and spot prices exceeded $100 after the Financial Times reported that the United States imposed tariffs on 1 kg gold bar imports, citing a letter from the country's Customs and Border Protection dated July 31.
The letter states that 1 kg and 100 ounce gold bars should be classified under a customs code subject to higher duties. As the newspaper notes, this move could seriously hit Switzerland, the world's largest refining center.
The last time the spread between futures and spot was observed was in 2020 during the COVID-19 pandemic, when disruptions in the transatlantic gold supply chain provoked similar disruptions.
"Tariffs will certainly disrupt gold trading, and Switzerland will bear the brunt. Premiums on physical gold are likely to increase, and this could lead to higher prices for consumers," said Zain Vauda, an analyst at MarketPulse (OANDA).
"This move could also create supply bottlenecks, which could lead to higher spot gold prices," he said.
US President Donald Trump's increase in import duties for dozens of countries came into effect on Thursday, forcing major trading partners such as Switzerland, Brazil, and India to hastily seek more favorable terms.
"I think we will see increased demand for safe-haven assets and increased uncertainty regarding the supply of gold in the US. Ahead of the weekend, I expect gold prices to remain high until the Trump administration releases more detailed information about the 39% tariff on kilogram gold bars," said Bob Haberkorn, senior market strategist at RJO Futures.
Gold, a traditional safe-haven asset, is also supported by expectations of an interest rate cut by the Federal Reserve next month.
Weak US employment data last week pushed CME Group's FedWatch tool to an 89% probability of a 25 basis point rate cut in September.
Spot silver prices rose 0.1% to $38.34 per ounce, platinum fell 0.7% to $1324.89, and palladium declined 1% to $1139.40.