Gold continued its record-breaking rally early Friday, briefly rising as high as $3,534 an ounce.
Analysts say the main catalyst was a report that gold bars would be subject to tariffs.
The precious metal has also gotten a boost from geopolitical tensions and economic concerns.
It’s a glittering year for gold.
The precious metal broke through another record high on Friday, briefly rising to $3,534 before paring its gains. At its peak, gold prices were up 32% from levels at the start of the year — far outstripping the S&P 500’s 8% year-to-date gain.
Analysts on Wall Street are pointing to three catalysts that drove the latest leg up:
The US specified that gold bars are subject to tariffs, the Financial Times reported on Thursday, citing documents it reviewed from the Customs and Border Protection agency.
A ruling letter dated July 31 from the agency said that one-kilo and 100-ounce gold bars would be grouped under a customs code that would subject to levies, the outlet said. That means gold bars could be subject to the 39% tariff on goods from Switzerland, which is one of the world’s largest producer of gold bars.
“The White House intends to issue an executive order in the near future clarifying misinformation about the tariffing of gold bars and other specialty products,” a White House official told Business Insider in an email.
Markets had previously assumed gold bars would be exempt from reciprocal tariffs, Helen Amos, a commodities analyst at BMO, wrote in a note on Friday. Trump’s original Liberation Day announcement included a separate customs code that said “non-monetary gold, unwrought, in the form of bullion and dore” would be exempt from import duties, she noted.
“If true, US citizens who tried to hedge the inflation impact of US President Trump’s trade taxes by buying gold bars must pay those same taxes on their hedge. The ruling suggests gold imported between 9 April and 7 August was subject to tariff,” Paul Donovan, the chief economist at UBS, wrote in a note.
Tensions between the US, Russia, and China are fueling gold’s rally, according to Samer Hasn, a senior market analyst at XS.com.
Hasn pointed to Trump’s attempts to broker a peace deal between Russia and Ukraine, which has involved imposing steep tariffs on some of Russia’s top trading partners, like India, and threatening to impose secondary sanctions on Russia if a ceasefire isn’t achieved by Friday.
China, another of Russia’s top trading partners, has also yet to reach a trade deal with the US, despite the looming August 12 deadline before higher tariffs take effect.
