(Bloomberg) — Prices for gold futures in New York and spot gold in London continued to converge after President Donald Trump said imports of bullion won’t be subject to US tariffs, following a federal ruling last week that sowed confusion across the market.
December gold futures on New York’s COMEX exchange held near $3,353 an ounce on Tuesday, while spot gold traded near $3.343 an ounce. Adjusting for the different delivery dates, the two markets are almost level with each other.
Most Read from Bloomberg
On Monday, Trump posted “Gold will not be Tariffed!” on social media, without elaborating further. It was a reassurance for the industry after US Customs and Border Protection stunned traders last week by ruling that imports of certain gold bars would be subject to duties.
Futures on New York’s Comex surged more than $100 an ounce above benchmark spot prices in London on Friday. The spread has since narrowed to about $50.
US Customs’ decision had sweeping implications for the flow of bullion around the world, and potentially for the smooth functioning of the COMEX futures contract. The administration had exempted the precious metal from duties in April, and Trump’s post appeared to reaffirm that view.
“President Trump’s statement is an encouraging signal for trade stability,” Christoph Wild, the President of the Swiss Association of Precious Metals Producers and Traders, said in a written statement. “However, only a formal and binding decision will provide the certainty the gold sector and its partners require.”
Gold has climbed more than a quarter this year, with the bulk of those gains occurring in the first four months. It’s been supported by geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.
Elsewhere, the dollar held a gain ahead of a US inflation report due later Tuesday that may offer clues on the Federal Reserve’s monetary policy path. Higher rates are negative for non-interest bearing gold, while a stronger greenback tends to make the dollar-denominated commodity more expensive for most buyers.
Investors were also weighing Trump’s move on Monday to extend a tariff truce on Chinese goods for another 90 days into early November. The move should ease worries of a renewed trade war between the two biggest economies, reducing haven demand.