Market News

(Bloomberg) -- Gold declined in New York after the White House suggested bullion bars shouldn’t face tariffs that stunned the market and sent futures soaring to a record last week.

Futures traded at about $3,400 an ounce on Monday. The Trump administration told Bloomberg that it would clarify what it called “misinformation” on the tariffing of certain gold bars and other specialty products, easing the price spike on Friday.

The shock caused by a US Customs and Border Protection ruling that certain bars would face import duties led futures on New York’s Comex to surge more than $100 above benchmark spot prices in London. The spread narrowed to about $50 on Monday.

Washington’s policy 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 back in April, and until there is long-term clarity, traders say, precious metals markets will remain on edge.

“We see the various segments of the gold markets behaving in an orderly manner as the industry awaits this potential clarification,” Joseph Cavatoni, senior market strategist for North America at the World Gold Council, wrote in a post on LinkedIn. “We will continue to monitor the situation and update our research and insights as information becomes clearer.”

The precious metal has climbed about 30% this year, although the bulk of those gains occurred in the first four months as geopolitical and trade tensions rattled the market. On Friday, spot prices closed higher for a second consecutive week, within around $100 of April’s all-time high.

Traders will also be looking to Tuesday’s US inflation print for clues on how the Federal Reserve will approach interest rates in the months ahead. Economists expect that consumer prices, excluding volatile food and energy, rose 0.3% in July, quickening from a 0.2% increase the prior month.

The central bank has been resisting pressure from President Donald Trump to loosen monetary policy, as it seeks to balance the risks of a cooling job market and still-elevated inflation. Lower rates are positive for non-interest bearing gold.

US gold futures were down 2.4% as of 1:26 p.m. in London. Meanwhile, spot gold slipped 1.3% to $3,352.19 an ounce. The Bloomberg Dollar Spot Index edged higher. Silver and platinum also fell, while palladium rose.

--With assistance from Yihui Xie.