Gold price futures post a fresh all-time high around $3,534.00 on Friday. The precious metal strengthens, following the announcement of tariffs on imports of one-Kilogram (KG) gold bar by United States (US) President Donald Trump, a move that prompted supply concerns.
The Financial Times (FT) reported that a letter from Customs and Border Protection (CBP) stated that one-kg and 100-ounce gold bars should be classified under a customs code subject to higher tariffs. The major victim of tariffs on imports of gold bars will be Switzerland, which is the world’s largest gold refining hub.
Additionally, firm market expectations that the Federal Reserve (Fed) will cut interest rates in the September policy meeting have also strengthened the Gold price. Lower borrowing rates by the Fed improve demand for non-yielding assets, such as Gold.
A slew of Fed officials has stated cooling labor market conditions is paving the way for monetary policy easing. On Wednesday, comments from Minneapolis Fed President Neel Kashkari, and San Francisco Fed President Mary Daly siganled that monetary policy adjustments are needed amid growing economic and labor market concerns.
On Thursday, Atlanta Fed President Raphael Bostic has also warned of slowing job creation, but refrained from committing to resumption of the monetary expansion cycle, citing that price pressures are expected to accelerate in coming months.
Meanwhile, arguments in favor of reducing interest rates by the Fed would get further appreciated with the nomination of Council of Economic Advisers Chairman Stephen Miran by US President Donald Trump as a replacement to Fed Governor Adriana Kugler.
