Gold Prices Hold Firm, Market Players Monitor US Tariff Policy
Gold futures prices in New York were stable at the start of this week, as market participants awaited clarity from the White House regarding the latest tariff policy. Uncertainty arose after a US government agency surprised the market with its decision to impose duties on 100-ounce and one-kilogram gold bars—a move that market participants had not anticipated.
On Monday, gold futures traded around $65 per ounce above global spot prices, after briefly hitting a new record on Friday. The increase was later pared after the government told Bloomberg that it would soon clarify "misinformation" regarding tariffs on gold and several other specific products. The price spread between trading centers in the US and London had widened to above $100 per ounce, but has now narrowed to below $60 per ounce.
This tariff decision has the potential to significantly impact global gold trade flows and the viability of gold futures contracts in the US. Although the precious metal was exempted from import duties in April, market participants remain cautious until there is longer-term certainty from the government. "We see various segments of the gold market behaving in an orderly manner as the industry awaits this potential clarification," wrote Joseph Cavatoni, senior market strategist at the World Gold Council.
Overall, gold prices have rallied about 30% this year, most of which occurred in the first four months due to geopolitical tensions and global market concerns. On Friday, gold closed higher for the second consecutive week, about $100 shy of its all-time high set in April.
Looking ahead, market participants will focus on US inflation data due this Tuesday for clues on the direction of Federal Reserve interest rate policy. Economists expect core inflation (excluding food and energy) to rise 0.3% in July, higher than the previous month. Lower interest rates tend to support gold prices, which do not yield interest. Meanwhile, spot gold prices edged down 0.1% to $3,394.13 per ounce at 7:46 a.m. Singapore time, with similar movements seen in other precious metals such as silver and platinum. (alg)
Source: Newsmaker.id
