Gold prices rose, futures hit a record high today
Global gold markets on Friday witnessed a record rise in precious metal futures, as gold continued to make gains for the second week in a row.
This rise was supported by multiple factors, most notably the trade tensions resulting from the new US policies, expectations of adopting a more accommodative monetary policy by the Federal Reserve, and customs duties on bars weighing a kilogram and 100 ounces.
Customs shock on gold bullion
According to press reports, the United States imposed sudden tariffs on imports of gold bars weighing one kilogram and 100 ounces, based on a decision issued by the US Customs and Border Protection Agency on July 31 last.
The move came as part of U.S. President Donald Trump's broader trade campaign to reshape a global trading system he sees as unfair to the United States.
Bullion traders had previously expected that gold bars weighing one kilogram or 100 ounces would be exempt from Trump's tariffs, including the 39% national rate imposed on Switzerland.
However, the new decision classified these goods under Customs codes subject to duties.
Direct impact on the global market
This decision led to:
- Gold futures in New York rose to a new record high, with December contracts hitting 3490.70 dollars after reaching an all-time high of 3534.10 dollars.
- Gold stability in spot transactions at approximately 3397 dollars per ounce.
- The precious metal has gained more than 1% since the beginning of the week.
A painful blow for Switzerland
Switzerland is considered the largest gold refining center in the world, as its gold exports to the United States topped 61.5 billion dollars during the twelve months ended last June, and with the application of new customs duties of 39%, this amount will be subject to additional duties estimated at 24 billion dollars, as this will make it more difficult to meet global demand for the yellow metal.
Factors driving the rise of gold
Besides the customs duties, there are several factors that contributed to the rise in gold prices:
- Expectations of interest rate cuts: weak US jobs data strengthened.
The forecasts indicate a rate cut of 25 basis points in September, as the market expected this action by 91% according to the FedWatch tool.
- Global trade turmoil: the comprehensive tariffs imposed by Trump on dozens of countries have entered into force, ranging from 10% to 50%, with a separate announcement of imposing 100% duties on imported semiconductors.
- The attractiveness of gold as a safe haven: under these conditions, the demand for gold as a safe asset that preserves value during periods of political and economic turmoil has increased.
Finally, as US trade policies continue to destabilize global markets, it seems that gold will continue to play its traditional role as a safe haven for investors in turbulent times, while the long-term effects of these measures on the global economy remain widely debated among experts.
