US gold futures rose to a record high on Friday after reports of a US import tax on 1 kg gold bars, while spot gold prices are still heading for a second consecutive week of increase thanks to fluctuations in tax policy and expectations of a US rate cut.
As of 7:34 a.m. GMT, spot gold prices remained steady at $3,396.92/ounce, after hitting a high since July 23 in the previous session. Over the week, the precious metal has gained about 1%.
US gold futures for December increased 1.4% to $3,502.90, after reaching an all-time high of $3,534.10.
The price gap between New York futures and spot prices has widened to more than $100 after the Financial Times reported on Thursday that the US has imposed import tariffs on 1 kg gold bars, citing a letter from the US Customs and Border Protection Agency.
The letter dated July 31 said that 1-kg and 100-ounce gold bars would be classified under a higher customs code a move that could affect Switzerland, the worlds largest gold refining center.
This change will not be valid for two weeks or a month, so you cannot immediately ship more goods. However, if you deposit today, the price will be the Swiss - London gold price plus the additional tax rate, which is a new price in the US. This has led to a simple increase in the difference between US gold prices and London prices due to higher costs, said UBS commodity analyst Giovanni Staunovo.
US President Donald Trump's higher import tax rates on imports from dozens of countries took effect on Thursday, forcing major trading partners such as Switzerland, Brazil and India to rush to seek better deals.
Gold is often considered a safe haven asset in times of political and financial instability.
In addition, the unfavorable US employment data released last week has reinforced expectations that the Federal Reserve will cut interest rates, with CME Group's FedWatch tool showing a 91% chance of the Fed cutting 25 basis points next month.
In other developments, spot silver prices fell 0.3% to $18.41/ounce, platinum prices remained unchanged at $1,333.88, and palladium prices rose 0.4% to $1,155.25.
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