Gold Hits Record Levels Due to Tariffs and Interest Rate Cut Expectations

Gold markets experienced strong movement on Friday, August 8, as futures contracts for the yellow metal surged to unprecedented levels supported by the United States' announcement of new tariffs on gold bullion imports, while spot prices maintained their weekly gains amid optimism for a more flexible monetary policy.

Gold futures for December delivery reached $3505 per ounce, marking a 1.5% increase after touching a record level of $3534.10 during the session. On the other hand, spot prices slightly declined by 0.05% to settle at $3395.27 per ounce, while maintaining their upward trend for the second consecutive week.

Media reports revealed that the U.S. administration imposed higher tariffs on gold bullion weighing one kilogram and 100 ounces, according to an official letter issued by the U.S. Customs and Border Protection on July 31. This decision is expected to negatively impact Switzerland, which is considered the largest global center for gold refining.

Market experts expressed concerns about the implications of this move, with Brian Lan, managing director of Gold Silver Central in Singapore, stating: "Tariffs on gold bullion will result in disruption," referring to the turmoil witnessed in trading on Friday and the decline in liquidity levels.

This development comes as the United States begins to implement a new round of tariffs on imports from several countries, prompting trading partners like Switzerland, Brazil, and India to accelerate their negotiations to reach more favorable trade agreements.

In a related context, weak U.S. employment data bolstered expectations that the Federal Reserve would cut interest rates soon, with current market estimates indicating a 91% probability of a quarter-point cut during the upcoming September meeting.

Regarding other precious metals, silver saw a decline of 0.3% to $38.20 per ounce, while platinum increased by 0.7% to $1343.64, and palladium remained steady at $1150.94 per ounce.