Gold futures hit record on US tariff shock, stocks wobble
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
eNCA
2 hours ago
- eNCA
Sesko completes Manchester United's new-look forward line-up
Manchester United signed Slovenian international Benjamin Sesko on Saturday, making him the third forward the 20-time English champions have acquired in the close season. The 22-year-old's arrival from RB Leipzig, in a deal reported to be worth up to £74 million (85 million euros, $99 million), completes an overhaul of the Red Devils' attack that failed to fire last season. Only four other teams scored fewer than United's 44 goals in 38 Premier League games last season as the English giants endured their worst campaign for 51 years, finishing 15th in the table. Sesko, who has scored 16 goals in 41 international appearances, is United's third major attacking signing following the recruitment of Matheus Cunha for £62.5m from Wolves and Bryan Mbeumo, who joined from Brentford for £65m with £6m in add-ons. "Manchester United is pleased to confirm that Benjamin Sesko has joined the club, subject to registration," read a club statement. The five-year contract includes a guaranteed payment of £66.3million, with the remainder in add-ons, according to reports. "The history of Manchester United is obviously very special but what really excites me is the future," said Sesko. 'When we discussed the project, it was clear that everything is in place for this team to continue to grow and compete for the biggest trophies again soon." Sesko had also been linked with Newcastle, but once again Eddie Howe's League Cup winners failed to land their target despite being able to offer European football this season, unlike Manchester United. Howe had seen Sesko as a ready-made replacement for unhappy Swedish striker Alexander Isak, who has been a target for champions Liverpool. - 'Exceptional young talents' - Sesko, though, said he felt a vibrancy at United as they seek to rebound from a desperately disappointing 2024-2025 campaign under 40-year-old Portuguese manager Ruben Amorim. "From the moment that I arrived, I could feel the positive energy and family environment that the club has created," he said. "It is clearly the perfect place to reach my maximum level and fulfil all of my ambitions. "I cannot wait to start learning from Ruben and connecting with my teammates to achieve the success that we all know we are capable of together." Sesko had also previously been linked with Arsenal after impressing during his two-year spell in Germany, where he scored 39 times in 87 appearances for Leipzig, including 21 goals last season. Standing 1.95 metres tall, Sesko's towering physique, electric pace and eye for goal have earned comparisons with Manchester City's Erling Haaland. Like Haaland, he also made his name at RB Salzburg before moving to Germany in 2023. United are banking on Sesko realising his abundant potential to fire them back into contention at the top of the Premier League table. AFP/File | Glyn KIRK Between them, Sesko, Cunha and Mbeumo combined for 58 goals last season. The massive outlay on their arrivals needs to bear fruit quickly with United under pressure to meet financial sustainability rules, especially without the revenue of European football this season. Sesko's arrival is likely to presage the departure of Rasmus Hojlund, whose plight might provide a salutary tale for the Slovenian. The 23-year-old Danish forward arrived with similarly high hopes but has failed to deliver and is reportedly subject to interest from Serie A side AC Milan. Sesko though has convinced United's director of football Jason Wilcox that he has the attributes to help propel United back into title contention. "Benjamin possesses a rare combination of electrifying pace and the ability to physically dominate defenders, making him one of the most exceptional young talents in world football," said Wilcox. "We have followed Benjamin's career closely; all of our data analysis and research concluded that he has the required qualities and personality to thrive at Manchester United." pi/gj
IOL News
4 hours ago
- IOL News
South African banks face scrutiny over political account closures
SA's big banks' trade policies in the spotlight Image: IOL Regulators have been warned against approaching complaints about South African banks in the same way as US president Donald Trump, who this week issued an executive order after accusing financial institutions of unacceptably restricting law-abiding individuals and businesses' access to banking services based on political or religious beliefs. Mametlwe Sebei, president of the General Industries Workers Union of SA (Giwusa), an affiliate of the SA Federation of Trade Unions (Saftu), said Giwusa would not support merely implementing moves similar to Trump's as the situation required the same interventions but for different reasons. Sebei said moves against the banks for being reactionary and assaulting human rights must be supported. "We also know that banks are not accountable in this country, there are political parties, trade unions, community organisations whose bank accounts were closed without an adequate explanation," he said. Sebei described banks as untransformed and that there is not much to look into as far as the banking industry and its conduct are concerned as many South Africans have suffered a lot. He said even Giwusa recently had a dispute with one of the country's major banks, which gave some members access to the union's accounts without authorisation and there were no adequate explanations. According to Sebei, companies perceived to be close to certain public figures have had their bank accounts closed without explanation. "When they close bank accounts, they are effectively condemning workers in those companies to unemployment, retrenchments and job losses. You cannot destroy a company to punish the owners," he said. Sebei said the idea that private banking institutions can take political decisions is extremely dangerous and that is why this should be strongly regulated. In addition, he said the law already provides for instances where there is suspicion of misuse of banking facilities by a client that is able to be reported to the authorities as provided for in the Financial Intelligence Commission Act. Sebei added that the current laws can be implemented without jeopardising jobs and the livelihoods of workers. "Financial services are a lubricant by which the economy is working, it has enormous power in society and in the economy that can destroy not only individuals but also companies and whole industries. These people are wielding enormous public power that has been privatised into institutions that are guided by profiteering and nothing else and want to exercise this power without transparency, accountability and even pass political judgment and that for me is deeply troubling," he said.
IOL News
5 hours ago
- IOL News
Economists warn of job losses as US tariffs threaten South African trade
The South African sugar industry is facing the threat of collapsing and job losses as a result of US President Donald Trump imposing 30% tariffs on the country's exports. Image: Karen Sandison / Independent Newspapers In the wake of the recent 30% tariff hike imposed by the United States, South Africa's sugar and automotive industries are bracing for significant upheaval. Economists warn that these tariffs could spell disaster for local businesses, jeopardising exports and leading to alarming job losses. An economist has warned that losing the market will collapse the industry after President Donald Trump's 30% tariff hike imposed on goods exported to the country's second biggest trade partner. Economist Miyelani Mkhabela shared these sentiments as some local exporters already expressed concern about their future. 'People have a reason to panic because the tariffs will make it difficult for South African products to appeal to the American market,' said Mkhabela. He said small industries are facing the danger of collapsing because although the normal trade deal between South Africa and the US might be restored after the end of Trump's presidency, 'four years is a lot for a company.' 'When the market is closed (through exorbitant tariffs), it means a lot for small businesses that are sending products to the American market would suffer, as their clients would say your products are 30% higher. 'That would collapse the South African manufacturing system because we depend on the US as our second trade partner,' he said. He said South Africa cannot easily find a country that could replace the American market, which 'is bigger than what we are sending to the whole of Africa'. However, he said the African economy would recover after four years as it recovered from the global financial crisis and 'is still recovering from the global health (Covid-19 pandemic). But after Trump, many emerging companies will no longer exist because they will fail to repay bank loans. SA Farmers Development Association (SAFDA) Executive Chairman Dr Siyabonga Madlala, who is involved in sugar manufacturing, is concerned that while businesses have no power over politically influenced tariffs, they are the ones bearing the brunt. Madlala anticipated a loss of millions of rand, a situation that would result in alarming job losses. He said the South African Sugar Association (SASA)'s lots of sugar meant for the US might go to waste. 'America, through AGOA (the African Growth and Opportunity Act), has given us a lucrative market for about 24,000 tons of sugar exports, so with the imposition of tariffs, our sugar won't be attractive to our US consumers as it is now becoming expensive. 'It forces US consumers to look for alternatives rather than buying from us because our sugar becomes 30% more expensive,' said Madlala. South African competitors in supplying the US with sugar are Mexico, Brazil, Australia, and several Central American and Caribbean nations. He estimated that, through the tariffs, SASA will lose R168 million from its annual revenue. According to Madlala, the US market, which found South African sugar affordable under the AGOA agreement, may look for alternative countries to buy from. 'The reason is that lots of other countries are subsidised, therefore they can afford to still sell sugar than us, as we are not subsidised but working on our own,' said Madlala. He said reducing production would cause job losses and the shutdown of sugar mills. 'Once you try to lower the production, it means some farms will shut down or diversify. By that, it means that sugar mills will lose sugar cane supply, which is the lifeblood of the sugar mill,' he said. He said the tariffs came at the wrong time when the government's master plan was succeeding in reviving some major sugar mills, including Tongaat Hulett, which in the process was coming out of business rescue. 'While we are appreciating the master plan's initiative, we are now bombarded with the tariffs,' said Madlala. Influential organisations such as FW De Klerk Foundation recently called for the country to expand its trade partners rather than relying on the US. Agriculture Minister John Steenhuisen said the government was also reaching out to other countries. However, Madlala said finding an alternative market was not easy to do overnight. National Association of Automotive Component and Allied Manufacturers (NAACAM) CEO Renai Moothilal told the media that the automotive industry was already feeling the effects, as some companies have started to lose US deals. 'We are already seeing new contracts, especially for the US, being cancelled or not pursued, putting one of the country's most critical manufacturing sectors at risk,' Moothilal said. Build One SA (BOSA) called on Ramaphosa to engage directly with the US Congress members, who will decide on the fate of AGOA, and tell them that over 500,000 US jobs are linked to trade with South Africa. Another economist, Khulekani Mathe, commended Ramaphosa for continuing to negotiate with Trump, as he cannot immediately find an alternative market. He said it was not guaranteed that South Africa/US trade would recover after Trump's departure. 'It is dependent on whether we are to negotiate anytime between now and four for more favourable terms. The economic recovery would depend on whether the country can find an alternative market to send the volume of products that are sent to the US, something that can not materialise in the short term. Professor Bonke Dumisa said Trump was miscalculating to think tariffs would benefit his economy because 'Economic History shows us that no one wins the tariff wars'. 'Purportedly, it is said that the USA wants to open space for its businesses to recapture the market space they lost as they focused on moving abroad to produce more competitively priced products. Unfortunately, USA businesses priced themselves out of the markets. 'The South African businesses affected by these Tariffs must look for alternative markets. There is very little that the government can do to help these businesses,' said Dumisa. [email protected]
