LIVE MARKETS-Tariff u-turn steadies gold, UBS keeps $3,500 view
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TARIFF U-TURN STEADIES GOLD, UBS KEEPS $3,500 VIEW
Trump's decision on Monday to withdraw tariffs on gold imports that threatened to upend the bullion market has eased some uncertainty and pulled futures back from a record high.
Late last week, U.S. Customs said it might place the most widely traded gold bullion bars in the U.S. under country-specific import tariffs, pushing gold futures GCv1 to a record of $3,534.1 an ounce. Spot gold hit $3,408.06, its highest since July 23.
But Trump rowed that back on Monday, ending speculation on whether gold will be caught up in ongoing trade ructions.
"While the immediate risk of tariffs on gold has been removed, the episode highlights the potential for policy-driven volatility," writes UBS GWM.
With uncertainty easing, UBS says their investment case for gold remains, bringing April's record $3,500.05 back in view.
"We expect de-dollarisation trends, sanction fears, and questions over Federal Reserve independence, alongside ongoing geopolitical and macro-related risks, to underpin our central case of USD 3,500/oz," they say.
"However, if things were to deteriorate, geopolitically or economically, then a rise in the gold price to $3,800/oz is a risk case cannot be ruled out."
(Samuel Indyk)
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EARLIER ON LIVE MARKETS:
STOXX NUDGES UP, BUT STUCK IN RANGE CLICK HERE
BEFORE THE BELL: EUROPEAN FUTURES EDGE UP CLICK HERE
TRUCE EXTENDED, ECONOMIC DATA NEXT CLICK HERE
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