Online Reporter
Gold held a loss after President Donald Trump said imports of bullion won’t be subject to US tariffs, although traders were still waiting for formal clarification over the policy following a federal ruling last week that sowed chaos and confusion across the market.
Spot bullion held near US$3 350 an ounce as markets opened in Asia, following a 1,6 percent drop on Monday after Trump posted “Gold will not be Tariffed!” on social media. Futures of the precious metal in New York also held a loss of about 2,5 percent.
US Customs and Border Protection stunned traders last week by deciding the imports would be subject to duties. The shock led futures on New York’s Comex to surge more than $100 above benchmark spot prices in London on Friday; the spread has since narrowed to about US$50.
Washington’s decision regarding gold tariffs has sweeping implications for the flow of bullion around the world, and potentially for the smooth functioning of the US futures contract. The administration had exempted the precious metal from duties in April, and until there is long-term clarity, traders say, precious metals markets will remain on edge.
Gold has climbed more than a quarter this year, with the bulk of those gains occurring in the first four months. It’s been supported by geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.
Elsewhere, the dollar rose on Monday ahead of a key US inflation report due later Tuesday that may offer clues on the Federal Reserve’s monetary policy path. Higher rates are negative for non-interest-bearing gold, while a stronger greenback tends to make the dollar-denominated commodity more expensive for most buyers.
Investors were also weighing Trump’s move on Monday to extend a tariff truce on Chinese goods for another 90 days into early November. The move should ease worries of a renewed trade war, reducing haven demand. Spot gold was up 0,2 percent to US$3 348.54 an ounce at 7:36 a.m. in Singapore. — Bloomberg
Bongani Ndlovu