Futures in New York reached record highs as traders anticipated exemption from tariffs on gold bars imported from Switzerland. However, US Customs later clarified that one-kilogram and 100-ounce bars are subject to levies. This decision could significantly affect the bullion market and hinder the functioning of US futures contracts. Gold's unique status as a financial asset amid trade uncertainties has created volatility, prompting concern for future trading dynamics. The industry is uncertain about potential tariffs on 400-ounce bars that are critical to trading operations.
In the long run, the existence of US tariffs on deliverable gold products raises the question on the role of futures trading in the US. Until there is clarity, we expect the gold market and precious metals markets more generally to remain very nervous.
The decision extends a tumultuous year for gold, which has soared to unprecedented levels amid strong buying from central banks and as Mr Trump's trade war drives haven demand.
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