Gold futures hit record on US tariff shock, stocks wobble

News.com.au

21 hours ago

Gold futures hit a record high Friday after reports of an unexpected tariff on the precious metal, while stock markets fluctuated as investors tracked US President Donald Trump's latest moves.
Oil prices added to losses from the previous day on news of a meeting between Trump and Russian leader Vladimir Putin, perhaps as early as next week, which raised hopes of a truce with Ukraine.
Gold futures reached a new intraday high at $3,534.10 an ounce after the Financial Times reported that Washington had classified one-kilo bars, the most traded type of bullion on Comex -- the world's biggest futures market, as subject to "reciprocal" tariff rates.
One-kilo bars make up the largest part of Switzerland's gold shipments to the United States. Imports from Switzerland face a 39-percent reciprocal tariff from Thursday. The FT said 100-ounce bars would also face the levy.
The levy caused "shock and confusion" in markets, said Han Tan, chief market analyst at Nemo.money trading group.
The gold future price pulled back to $3 an ounce.
Spot gold prices sat around $3,400 an ounce.
Saxo Bank analyst Ole Hansen said banks invest in gold futures to protect themselves from price swings in the physical bullion market.
As tariffs threaten to raise prices for physical gold, these "short positions originally intended as hedges suddenly blow up", prompting banks to buy back futures and driving prices higher.
Wall Street stocks pushed higher, a day after the tech-heavy Nasdaq finished at a fresh record. That kept the market on track for weekly gains near the finale of an earnings season that has generally topped expectations.
With most major companies having already reported quarterly results, companies in the S&P 500 are on track for greater than eight-percent growth, compared with the 2.2 percent forecast just ahead of the reporting period, said a note from CFRA Research.
CFRA's Sam Stovall said the results had reassured investors, who are "discounting the uncertainties and going along with the expectation that the economy is holding up better than people might be worrying about".
In European trading, both London's FTSE 100 and Frankfurt dipped, while Paris stocks edged higher.
Japanese stocks led the way on a mostly negative day for Asian markets, fuelled by relief that Tokyo and Washington had settled a tariff issue that raised concerns about their trade deal.
"Since the tariff agreement between the US and the European Union, some clarity has emerged, but confusion around its implementation is just beginning to surface," said Jochen Stanzl, chief market analyst at CMC Markets.
"In Japan, there is relief today upon hearing that the various tariffs will not be cumulative," he added.
The Nikkei 225 stocks index jumped nearly two percent after Japan's tariffs envoy said Washington was expected to revise an executive order that stacked tariffs on top of each other.
"However, it remains unclear whether the same rules apply for Japan and the EU," Stanzl added.
- Key figures at around 1530 GMT -
New York - Dow: UP 0.3 percent at 44,076.64 points
New York - S&P 500: UP 0.6 percent at 6,378.57
New York - Nasdaq Composite: UP 0.8 percent at 21,408.81
London - FTSE 100: DOWN less than 0.1 percent at 9,095.73 (close)
Paris - CAC 40: UP 0.4 percent at 7,743.00 (close)
Frankfurt - DAX: DOWN 0.1 percent at 24,162.86 (close)
Tokyo - Nikkei 225: UP 1.9 percent at 41,820.48 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 24,858.82 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,635.13 (close)
Pound/dollar: UP at $1.3453 from $1.3445 on Thursday
Euro/dollar: DOWN at $1.1664 from $1.1665
Dollar/yen: UP at 147.73 yen from 147.07 yen
Euro/pound: DOWN at 86.73 pence from 86.76 pence