Donald Trump plans to issue an executive order to clarify "misinformation" about gold duties, sources told Bloomberg, The Wall Street Journal and Reuters at the White House. The news came as a relief to investors as gold futures, which hit a record high on Friday, slowed sharply.

Details

U.S. President Donald Trump "intends to issue an executive order soon to clarify misinformation regarding duties on gold bullion and other specialized goods", quoted The Wall Street Journal as saying its White House source. The newspaper did not disclose the name of the interlocutor. As wrote Bloomberg, the White House position is to confirm that imports of gold bullion should not be subject to duties.

Amid the announcement, December gold futures on New York's Comex exchange sharply cut their gains. In trading on Friday, they rose as much as 2.3% at one point - to a record of $3534.1 - before stabilizing at around +1.1%. And after sources reported the White House "clarification" the pace of growth slowed to about 0.1%.

"Gold's panic rally shows that even defensive assets are not immune to the volatility caused by the confusion of the duty era," noted Suzanne Streeter, head of markets and finance at Hargreaves Lansdown, as quoted by Reuters.

Context

The fact that gold imports could fall under the duties became known on August 8. Gold bars weighing 1 kilogram and 100 ounces are subject to Trump's mirror trade duties, according to a letter US Customs and Border Protection (USCBP) dated July 31. It was brought to the attention of the Financial Times.

The decision shocked the market, as market participants had previously believed these forms of bullion would be exempt from trading fees, noted Bloomberg. Some Wall Street analysts have even admitted that this is likely a mistake by the USCBP, and if not, that it will be challenged in court, because imposing high duties on the precious metal could have far-reaching implications for the global market and disrupt U.S. futures contracts.

Gold is uniquely positioned as a financial asset and global currency, which sets it apart from other metals such as copper, steel and aluminum already hit by Trump's duties, notes Bloomberg. 

This article was AI-translated and verified by a human editor

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